Managing Cash Flow Budgets

This document explains how to create a balance budget for one specific purpose: To plan the company's cash flow.

Outcome

A balance budget with payments and payments received is created based on an existing profit & loss budget. This cash flow budget can be created either as a separate, independent budget or be included in an existing budget. It is automatically printed and can be reviewed in 'Budget. Open' (BUS100).

What values are included depends on whether the budget is intended for long-term or short-term cash flow planning. Cash Flow Conversion for further information.

Use the cash flow budget to analyze and plan your company's solvency. The long-term cash flow budgets functions as an independent cash flow management tool. The short-term budget, however, is used as input in a cash flow plan.

See Cash Flow Conversion.

Before you start

Follow These Steps

Outline
  1. Create Cash Flow Proposal or Definite Cash Flow Budget

    Create a budget proposal in 'Cash Flow Budget. Create from a Budget' (CFS100). Selected values in the profit & loss budget are automatically allocated in time and converted to payments and payments received. User-defined allocation and accounts conversion tables control the process.

    The proposal is only printed and is not saved in M3. If you already have verified that the values are correct, create a definite cash flow budget directly.

  2. Verify Cash Flow Budget

    Review the budget or the proposal to make sure that the values are correct and posted on the correct accounts.

  3. Adjust Input Values

    If the budget or budget proposal created is not correct or needs to be adjusted, select any of these alternatives and create a new proposal or budget:

    • Adjust the base profit & loss budget in 'Budget. Open' (BUS100).
    • Adjust the allocation table in 'Allocation Table. Open' (CFS015).
    • Adjust the accounts conversion table in 'Conversion Table. Open' (CFS010).
  4. Manually Adjust Values in Cash Flow Budget

    Add new values to an existing cash flow budget in 'Budget. Open' (BUS100). You usually do this when you expect changes in the company's assets or liabilities that affect the cash flow in the upcoming future. (For example, a fixed asset is going to be sold or investments in machineries have to be made.)

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