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Cash Flow Manager

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This document serves as an introduction to the Cash Flow Manager (CFM) role which is run in the Iptor PlannerView user interface.

The CFM role is designed to support a cash flow manager when working with the cash flow forecast of a company or company group.

Introduction

The cash flow forecast provides possibilities to:

  • Present expected incoming and outgoing payments in a calendar view summarised per expected payment date on a monthly, weekly and daily level.
  • Collect information about expected payments such as sales orders, A/R documents, purchase orders and A/P documents automatically from DC1.
  • Allow manual addition of expected payments that may not be found within DC1 such as upcoming payrolls and other recurring cash expenses, to present a complete cash flow picture.
  • Display the actual cash and bank accounts opening balances from DC1 as a starting value of the cash flow forecast.
  • Analyse the forecast in transaction, system or reporting currency. System and reporting currency are also revaluated and presented to actual exchange rates.
  • Show an aggregated forecast for several companies in the same calendar view.
  • Drill down to view the underlying details of expected payments, e.g., the individual sales orders, A/R transactions, purchase orders and A/P transactions.
  • Adjust expected payment dates for open sales orders, A/R documents, purchase orders and A/P documents based on the previous payment behavior of the business partners.
  • Analyse the evolution of the previous payment behavior of a business partner, i.e., how your customers have previously paid you or how you have previously paid your suppliers.

Definitions

This section describes the following definitions used within the CFM role:

Opening balance

The starting value for the cash flow forecast is the actual closing balance of all cash and bank accounts up to and including yesterday’s date. Which accounts to be included in the cash and bank opening balance are defined in the collection view Cash and Bank accounts.

Expected payments

Information about expected payments that may be found in the DC1 database such as sales orders, A/R documents, purchase orders and A/P documents are automatically collected, compiled and presented in the forecast Calendar view. You may choose to collect and compile the expected payments for the cash flow forecast on a regular basis, e.g., daily, weekly or monthly.

In addition, you also have the possibility to manually add expected payments that cannot be retrieved automatically from DC1. Examples of these payments include taxes, loans to be paid off by instalments, upcoming payrolls, and other recurring cash expenses. By doing this you will obtain a complete picture of your company’s cash flow.

All expected payments are categorised into types of payments referred to as cash flow forecast types.

The following Cash flow forecast types are preloaded at installation:

Cash flow forecast type Description Information collected automatically from DC1 Y/N *
A/P A/P documents Y
A/R A/R documents Y
ARDIS A/R invoices in transfer from DIS to FIN Y
PURCHASE Purchase orders Y
SALES Sales orders Y
INTEREST Interest N
LOANS Loans N
PERSONNEL Personnel N
TAXES Taxes N
VAT VAT N

* Expected payments for A/P, A/R, ARDIS, PURCHASE and SALES are automatically updated by the system. See section Run time considerations for further information. Interest, Loans, Personnel, Taxes and VAT must be updated manually by the user. See Enter forecasted payments manually.

Expected payment deviation days

To be able to present a forecast as accurately as possible there is an option to adjust the nominal due date (the expected payment date) of sales orders, A/R documents, purchase orders and A/P documents based on the previous payment behavior of a business partner. This means if your customer usually pays two days late, the cash flow forecast will reflect that fact.

This previous payment behavior of a business partner, referred to as Expected payment deviation days, displays the average number of deviating credit days in relation to the due date. The figure may be negative as well as positive.

Expected payment deviation days may also be calculated for suppliers, providing information about how you have previously paid a specific supplier. This means it is possible to show expected payments in the cash flow forecast due earlier than the actual due date if you, e.g., take advantage of favorable cash discount terms or use extra credit days.

Calculated

This figure is calculated in a batch routine which should be run on a regular basis, e.g., quarterly or every six months. The calculation may be performed for all business partners at the same time or for specific business partners individually. It is based on all payments made for the business partner during a selected time span. The routine may be run separately for debtors and suppliers and individual business partners.

Note: If you do not want the expected payments to be adjusted based on the previous payment behaviours, then you simply do not run the calculation routine at all.

Fixed

The calculated expected payment deviation days figure may be overruled by a fixed figure entered by the user. See Enter fixed expected payment deviation days (EPDD).

Historical

Expected payment deviation days should be calculated on a regular basis, e.g., quarterly or every six months. When a new calculation is performed, the previously calculated expected payment deviation days value, now referred to as historical expected payment deviation days, is saved per business partner. This makes it possible to view the expected payment deviation days’ evolution for a specific business partner over a period of time. See Enter fixed expected payment deviation days (EPDD).

Run time considerations

The cash flow forecast is based on a large amount of transactions found in DC1. In order to receive the best performance when working with the cash flow forecast, all information in DC1 that needs to be aggregated or calculated are collected from the DC1 database and updated into CFM specific files.

Note: The CFM specific files reside within the DC1 database library, which means no specific backup routine is needed for these files.

The following information is updated into the CFM files:

  • Expected payments that can be found in the DC1 database such as sales orders, A/R documents, purchase orders and A/P documents.
  • The actual opening balance for cash and bank accounts, which is the starting value for the cash flow forecast.
  • Expected payment deviation days used to adjust the expected payment date for the automatically collected expected payments.

These updates may be started in two different ways:

  1. Automatically, on a regular basis, e.g., daily, weekly or monthly, by scheduled batch jobs set up in DC1 Job Control. This is strongly recommended in order to optimise performance.

    Note: The setup for scheduled batch jobs should be performed by a DC1 representative or your local system administrator. See Setting up scheduled batch jobs for Cash Flow Manager for instructions.

  2. Manually by the user from the CFM role. See Setting up the Cash Flow Manager role.
  3. Starting the update manually may be useful:

    • when you want to start working with the CFM role before the scheduled batch jobs have been set up,
    • if the scheduled batch job did not complete successfully for any reason, or
    • if you only want to update the opening balance for a specific or a range of cash and bank accounts.

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