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CASH FLOW FORECASTING

The Cash Flow Forecasting feature of Martus anticipates how a budget will influence both the cash flow and the balance sheet.

It offers a forecasted balance sheet that is created from the budget details, and it also produces a cash flow projection that is linked to and consistent with the anticipated balance sheet.

Our approach is based on this:

Every budget item has an impact on a balance sheet account. What we call “cash flow mapping” determines the amortization of each budgeted item away from the balance sheet account it has increased.

In the most straightforward examples: budgeted sales increase Accounts Receivable, which is are decreased over time by the projected timing of receipts, while budgeted expenses increase Accounts Payable, which is decreased over time by the projected timing of payments. 

Martus makes it easy to define the default balance sheet impact of each budget line, so ordinary end-users don’t have to be concerned about this.  At the same time, Admin users from the finance team can apply very granular overrides to specify the balance sheet and cash flow impact of individual budget lines. Martus also provides a method to use Global SPWs to define the complex balance sheet and cash flow impact of items such as prepaid expenses, loan payments, and deferred revenue.

The Cash Flow Forecasting module also includes extensive reporting on the cash flow and balance sheet impact of each budget line so that you can fully trace and confirm the impact of what you’ve budgeted.