If you don’t understand where some of your cashflow figures are coming from, or need to track down an anomaly in your Cashflow Forecast, then this help note is for you. Assuming you have already taken appropriate steps to prepare a cashflow forecast, this help note will help you understand the calculations that make up your resulting Cashflow Forecast report. It is not designed as a step by step guide to cashflow forecasting in Calxa, and you should refer to these related help notes for assistance in this area: Preparing a Cashflow Forecast and Step by Step Cashflow Projections.  


Calxa Settings That Affect Cashflow

To effectively troubleshoot cashflow you first need to understand what settings affect your cashflow figures. Listed below is an overview of all the settings and terminology that affect cashflow, with some links to associated support material. 

  • Default Accounts – for more detail please refer to Preparing a Cashflow Forecast or Default Accounts
    • Bank Accounts 
    • Depreciation Accounts
    • GST Accounts and Schedule
    • PAYG Withholding Account and Schedule
    • PAYG Instalment Account, Schedule and Rate
    • Superannuation Accounts and Schedule
    • Trade Creditor and Trade Debtor Accounts
    • Wages Accounts and Wages Tax

  • Cashflow Settings – for more details please refer to Preparing a Cashflow Forecast
    • Cashflow Types – Calxa Express user cannot edit these settings
      • None
      • Profile 
      • Schedule 
      • Debtor Days
      • Creditor Days
      • Wages tax
    • Default Tax

  • Cashflow Schedules – for more details please refer to Preparing a Cashflow Forecast

  • Budget Version and Budget Source – for more details please refer to Organisation, Business Units and Budget Versions 

Frequently Asked Questions or Common Problems


In this section we will address some of the common questions or problems you may find when preparing a Calxa Cashflow Forecast. All answers or suggestions will reference the settings and terminology listed above, so please ensure you have at least a basic understanding of these settings. 


Why does my cashflow not have any values?

Calxa converts budgeted P&L and Balance Sheet movement to cash movement to create your forecast, so no figures suggests there are no budgets to base the calculations on. Check the following:

  • Are you using the correct Budget Version?
  • Are you using the correct Budget Source i.e. Consolidated Projects or Departments?
  • Are your budgets entered in the correct year?
    • When reporting across financial years ensure that all budgets are in the same budget version

Why are all the values greater than my budgets?

When you run a P&L report you are reporting on Tax exclusive amounts. The same can be said of your budgets, and they should all be exclusive of tax. When Calxa converts this to your cashflow it will add tax to these budgets where appropriate, because you are collecting or paying for this in cash terms upfront. See How is GST Calculated and Paid? below for more detail.  


Why don’t my cashflow figures match my budgets?

The answer is: they rarely should. Many factors affect how your budgets are converted to cashflow movement. It may be that there is tax being applied, or perhaps creditor or debtor calculations are pushing payments, or receipts into future months. In other words this is the intention; just because you have invoiced $1,000 income in a month does not mean you will collect on those invoices in the same month. The most common default Cashflow Setting is Debtor Days or Creditor Days. If the days count is high, then the payments and receipts for a single month’s budget will be spread out across multiple months. For a graphical representation of this calculated payment profile, have a look at the graph on your dashboard. Hover your mouse on this symbol ( only_image ), next to the Debtor Days or Creditor Days KPI. Please refer to What Calxa settings affect cashflow? above for a comprehensive list of settings and their affect. 


How is GST calculated and paid?

GST will be added to all budgets, where appropriate, based on the Default Tax code set in the Cashflow Settings screen. For MYOB and Xero users, this association is made based on the settings in your accounting package. Changes can be made in the Cashflow Settings screen, however you should consider making the changes in your accounting package first and updating Calxa to reflect these changes. Once the appropriate Default Tax codes are set, tax will be applied to each account at the rate set on each tax code in your accounting package.

 

Next you must look at the settings in the Default Accounts screen. With the Accrual Calculation type set, the tax portion is tracked against your GST Paid and GST Collected accounts and a payment is made according to the chosen Schedule. The payment amount will be equal to the difference in the closing balances of both GST Paid and GST Collected at the end of the reporting period. With the Cash Calculation type set, the GST payment amount is calculated based on the cash movement on each account in the reporting period. Each account’s approximate cash movement is calculated and the tax portion is applied. The sum of the tax amounts equals the payment amount that is paid according to the nominated Schedule.


How is Employee Tax (PAYG or PAYE) calculated and paid?

The sum of all nominated Wages accounts will be multiplied by the Wages Tax value set in the Default Accounts to calculate a PAYG Withholding budget. The PAYG Withholding budget will be automatically added to the PAYG Withholding account nominated in the Default Accounts screen and paid on the chosen Schedule


If multiple wages accounts are used, and you would prefer to set separate tax rates for each account, you may exclude them from the nominated accounts and manually set the Cashflow Type to Wages Tax in Cashflow Settings screen.

 

How is Superannuation or Kiwi Saver (NZ) calculated and paid?

The sum of all Superannuation Expenses nominated in the Default Accounts screen will be used to calculate a Superannuation Payable liability budget. This budget is added to the Superannuation Payable account/s also nominated in the Default Accounts screen. Where multiple payable accounts are nominated, they will be treated as a combined account with a combined budget. In cashflow terms, a payment is made according to the chosen payment Schedule


If multiple Superannuation accounts are used, and each account requires separate payment schedules then you will need to set this up manually. To do this make sure you do not have any Default Accounts nominated in the Superannuation Expense or Superannuation Payable categories, and then setup a scheduled payment budget, as outlined in the Support Note article: Understanding Balance Sheet Budgets.


Net Assets does not equal Total Equity

When running the Balance Sheet Forecast report it is possible for the Net Assets to not equal Total Equity. This occurs when the budget is not properly balanced. For the most part Calxa will keep the budget in balance for you, the exceptions being when you budget on accounts with a cashflow type of None or Schedule. Please refer to the Budget Requirements section of Preparing a Cashflow Forecast for details on balancing your budget and you can use the Discrepancy Analysis Report to highlight any discrepancies you might have.


The first month in your cashflow has very large inflows or outflows

Understanding the Problem

Generally this problem will not occur if you are using the default cashflow settings, as it normally suggests the cashflow settings are not closely matching reality. Or this can also occur when there is a large, out of the ordinary, value sitting in your trade debtor or trade creditor accounts. 


For example; let’s assume your trade debtor balance is $10,000 and all of your income accounts have a cashflow profile of 50% in the current month and 50% in month 1. By setting this profile you are telling Calxa that nothing will be outstanding until month 2. That is an important concept because Calxa will try to collect on all of the debtor balance, the full $10,000 in the first month. 


Let’s look at the same figures another way. If the debtor balance is $10,000 then, based on the cashflow settings, we expect the previous month sales to be something close to $20,000. This is because; the cashflow profile says that 50% of a month’s income on average is still outstanding the following month. If your previous month’s income was only $12,000 then you can see that the cashflow settings are not matching reality because we would expect a debtor balance of $6,000 and not $10,000. To collect the full $10,000 instead of just $6,000, Calxa will adjust all the calculated inflows by a factor of 10,000/6,000 or approx. 1.6667, to make up for this variation between expected debtors and actual debtors.   

The Fix

First of all you need to decide if it is a problem with your cashflow profiles or a problem with your debtor or creditor balance/s. If it is the cashflow settings, consider the following.

  • Set the cashflow settings back to a calculated profile of Creditor or Debtor days
    • This is a calculated profile and each time you update your data it will adjust accordingly
  • Adjust your custom profiles to something more realistic
    • Do you need to make them 50%, 40% then 10% instead of 50% then 50%?
    • Consider if one account can be adjusted, is there one account that sits outside the normal profile
      • If so create a profile with a greater spread which more accurately encapsulates the outstanding debtor or creditor on this account
    • Are there some accounts you have set to 100% current when in reality they should be 90% and then 10%?

If the problem more likely lies in your debtor or creditor balance, consider the following.  

  • Reduce the balance by only nominating your primary debtor or creditor account in the default accounts screen
    • For example have you nominated additional debtors/creditors that do not fit with your cashflow profiles
  • Write off bad debt
    • Have you got some debtors that are not likely to be collected or in dispute?
  • If the majority of the value is from one account adjust the cashflow profile on this account to match
  • In extreme circumstance you can isolate strange transactions by giving them their own account and assigning an appropriate cashflow profile