Using Three-Way Cashflow Forecasting

Create efficiency in your practice through automation. ProfitSee's Three-Way Cashflow tool allows you to generate three year cashflow forecasts based on historical performance with the click of a button!

For more about the Balance Sheet and how it affects you, read our blog post "Balance Sheet Projections and You". 

 

Creating the Baseline Projection

 

  1. Log into your ProfitSee account and open the company file you want to work with.

  2. Click "Forecasting" on the left-hand navigation panel.

  3. Select the "3-Way Cashflow Forecast" tab. ProfitSee will automatically begin calculating your baseline projection if the file has sufficient historical AR/AP data.*

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**NOTE: If you do not have enough historical data (at least 12 months), you will receive the following prompt to upload a spreadsheet containing this information. If you do not have access to the historical AR/AP data, we suggest making your best guess, but beware that the corresponding baseline projection will not be as accurate.

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4. Select the 'Setup Wizard' Button to configure the 3-way cashflow forecast in a way that truly reflects the reality of the business and ensure all considerations are taken into account when projecting future growth and risk.

 

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Here you will be able to make key decisions on important factors that invariably have an impact on the immediate and long term future of the business.

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This includes how the business recognizes and reconciles Owners Compensation, whether they track taxes on an accrual or cash basis, and if there are any accounts or long-term liabilities such as loans or depreciation that do not have an effect on cash movement.

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5. Once your baseline projection is created, you can view it in rolling or a monthly view. Just click on the desired view on the right-hand side above the projection. 

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This rolling year-to-date period is also available in the chart viewing option, below is an example. 

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By choosing the monthly chart viewing option, the chart will show you the monthly values for each account type represented by their own color. 

Monthly_Chart

 

Now you are ready to start building strategies for your Three-way cash flow projection. You can choose between the following categories: Add a Loan, Monthly Revenue, Monthly Expenses, Cash Infusions, AR /AP Assumptions, Sales Tax Assumptions, Add Scenarios. For more detailed information in building specific business strategies and What-if scenarios please consult our linked support articles. 

 

Thanks for reading! If you have any other questions please contact your account manager, or reach out to our support team at support@myprofitsee.com.