Cash Forecasting (AR258)

Use Cash Forecasting Report (AR258) to create a cash forecasting report used to project incoming cash based on the outstanding open items for a company. Two methods are available for forecasting. One method assumes the open item due date is the date cash will be received. The other method uses the customer's payment history, the Invoice Payment Average (IPA), to determine the date cash will be received. The IPA is the average number of days a customer's invoices are outstanding. The IPA is added to the invoice date to determine the date cash will be received.

The IPA is calculated as follows:

1. Calculate the days outstanding by subtracting the invoice date from the date of payment deposit.

2. Calculate the flow of funds days by multiplying the days outstanding by the payment amount.

3. Add the payment amount for all invoices.

4. Add the flow of funds days for all invoices.

5. Dividing the total flow of funds days by the total payment amount.

Company totals are included for past due open items, unapplied payments and credit memos, net past due amount (past due open items less unapplied payments and credits), and incoming cash projections by date. Past due is defined as an open item due date on or before the system date. Cash projection is determined by the Totaling Days and Future Cutoff Days you define. The date cash will be received for an open item must be on or before the system date plus the Future Cutoff Days to be included in the cash forecast. Projection totals are included for each multiple of the Totaling Days up to the Future Cutoff Days. You can select a process level or currency and define aging periods and percents to further define the listing.