Cash Flow Mojo – The Perfect Choice for any Business
It is said that money cannot buy happiness and peace. But yet, it buys almost all the other things that can be defined as matters. It is not always easy to earn money in heaps and even if you do, there is always a problem of the cash outflows. From the business point of view, this comes across as a gravitational point. For a business to run properly, it must be aware of the incoming and the outgoing cash flows to maintain a perfect harmony in the financial affairs. Most activities of a firm generate corresponding cash inflows and cash outflows respectively. A cash statement records all cash flows of the firm related to its various activities, covering a specific forecasting horizon divided into one or more suitable accounting period, or it may record cash flows pertaining to a previous period. Generally it does not cover transaction which do not directly result in cash receipts and payments, such as, depreciation of its assets or write offs of bad debts or credit losses, etc. However, in some methods of its preparation, in addition to actual cash flows, accruals (or their cash equivalent) are also included and reversed in subsequent time intervals. However many of the manual cash statements may not be specific and fully operative, and it is then external help is required to perceive each cash flow (whether incoming or outgoing) properly and then act accordingly. Cash flow budget is one such software that eases your job.
As noted above, a cash flow statement is a policy oriented recording of either actual or projected cash inflows and cash outflows of a firm. For a particular firm, the main sources of cash flows may include many factors pointing to the operating activities, or the budget even. Some of them are sale of services and goods, sale or collection of operating receivables, interest received, dividends received, and other monetary receipts which are not directly linked to investing or financing activities. The main outflows of cash include purchasing raw materials for making the final product, payment to the supplier of other business inputs, payments of fees, fines and government taxes for the business purpose, interest payment to the money lender, payments to the employees of the organization and expenses regarding the improvement of the working environment and many other expenses related to the organization but not directly linked with business activities. Most of the factors mentioned above, i.e. the fixed ones can be taken care by the cash flow budget software. And its efficiency is the one to look out for.
The software, along with all the effective tools in its package has been named as Cash Flow Mojo. The budgeting software is an effective package that includes all the tools and the software needed to help the business ones, mostly medium sized ones who generally cannot afford the huge financing recording schemes. The software package helps the financial statements to be more organized and thus present the real terms of the business along with other views, on the near future and also shows the possibilities of actions that can be undertaken in the future. Thus, the cash flow budget softwarealso rolls out the impetus for future action plans. The financing activities cover the area of the equity and debt financing of a particular firm. From the angle of financial activities, the cash inflows include the cash earned from the selling of own stock and cash borrowed from the money lender and the cash outflows include the cash paid to repay the debt obligations, cash paid for acquiring equity investments of other entities, and the surplus paid to the stockholders.
The investment activities also matter to the firm, as it falls within the physical and financial assets. The investing activities generating cash inflows include recovery of loans from debtors, sale of investments in equity of other business entities, sale of performing assets, and sale/ leasing of sales outlets or parts thereof. The investing activities generating cash outflows include acquisition of debt instruments, purchase of equity interest of other entities, purchase of productive assets, acquisition of production/ sale/ marketing facilities for other firms. Depending upon the details of the entries, this section of cash flow statement may provide indications of diversification, expansion and contraction plans of the firm. The cash flow budget package contains a specific budget template that performs some specific actions. Some of them are as follows,
- It would inform you of how much the required cash flow is estimated for each week, so that you can work toward the goal with much enthusiasm and persistence and clear vision.
- It would also calculate the exact amounts of debt that needs to be cleared by you in order to be free from all obligations and thus carry on peacefully with cash inflows exclusively.
- It also highlights the specific areas where the expenses of every kind can be decreased without trying to do any harm in the quality of the goods produced or work done.
- It uses a specific formula for working out the cash flows, with pictorial representations such as graphs, pie charts etc. to expand the business of yours or to enable it to run smoothly without any hiccups.
- The budgeting software also organizes your expenses in a very organized manner, so that you can take decisions related to your company in an efficient way and after well thought decisions.