How do I create and manage Budgeted Cash Flows?

This article will demonstrate the new beta Budgeted Cash Flow functionality that helps you forecast, track, and analyze farm expenses, revenue, and assets.

 

How do I create a budgeted cash flow report?

1. Navigate to Reports on the left hand menu, expand and click on Accounting. Click on Budget then click on Budgeted Cash Flow.

2. Click on the drop down box and click the +New button.

3. Fill in the Start Month, Budgeting period, Entity, and a description, then click save.

4. The page will fill in based on the entity & date selections, you will then click edit at the bottom right to access and fill in categories. 

How do I enter Revenue?

1. Click on the drop down arrow to the right of Revenue. 

2. The action above will list all revenue accounts for the selected entities. 

3. Enter the expected revenue that you will receive for each account in the month that you expect to receive the cash/ record the deposit.  

How do I enter Expenses?

1. Click the drop down arrow to the right of Expenses.

2. You will see listed all active expense accounts for the selected entities. Enter the expected expenses that you will pay for each account in the month that you expect to pay for the expense (when you write the check). 

How do I manage Asset Sales?

1. Click the drop down arrow to the right of Asset Sales.

This will list all active accounts under the following categories in the Chart of Accounts:

• Property and Equipment
  • Equipment Land, Buildings & Structures, and Land Improvements
  • It will only list the “Cost” accounts and not Accumulated Depreciation
• Other Current Assets
• Other Long Term Assets

2. Enter the amount of cash you expect to receive related to sales in any account in the month you expect to receive the cash. 

How do I manage Asset Purchases?

1. Click the drop down arrow to the right of Asset Purchases.

This will list all active accounts under the following categories in the Chart of Accounts:

• Property and Equipment
  • Equipment Land, Buildings & Structures, and Land Improvements
  • It will only list the “Cost” accounts and not Accumulated Depreciation
• ‘Other Current Assets
• Other Long Term Assets

2. Enter the amount of cash you expect to pay related to any purchases in any account in the month you expect to pay the cash. 

How do I manage New Debt?

1. Click the drop down arrow to the right of New Debt. 

This will list all active accounts under the following categories in the Chart of Accounts:

• Notes Payable - Short term
  • Any account NOT marked as “Functions as a checking account”
• Notes Payable - Long Term
• Other Current Liabilities
• Other Long Term Liabilities

2. Enter the amount of money received/ borrowed on loans in the month you expect to receive it.

 

How do I manage Debt Reduction?

1. Click on the drop down arrow on the right of Debt Reduction. 

This will list all active accounts under the following categories in the Chart of Accounts:

• Notes Payable - Short term
  • Any account NOT marked as “Functions as a checking account” 
    (Please note- These accounts will be included in the Cash Positions section of the Budgeted Cash Flow Report. ) 
    
    
• Notes Payable - Long Term
• Other Current Liabilities
• Other Long Term Liabilities

2. Enter the amount of money paid on loans in the month you expect to pay it.  

How do I manage Owner Draws?

1. Click on the drop down arrow to the right of Owner Draws.

1. This will list all active Drawing and/or Dividend accounts for the entities.  Enter the net amount that will be paid to owners ( via family living payments and deposits) for each month.

If there will be more income to the farm (Family Living in a Deposit) enter the net amount as a negative value.

How do I manage Cash Position? 

1. Click the drop down arrow to the right of Cash Position. 

 

Traction will calculate the Beginning Cash Position for the first month of the budget by taking the balance of the following accounts as of the end of the previous month (Budget that runs from January - December would use balances as of 12/31 of the prior month):

• Total of all Bank and Cash Accounts
• MINUS total of all Credit Card Accounts
• MINUS total of all “Notes Payable Short Term” that are marked as “Functions as a Checking Account”

The Beginning Cash Position can be adjusted if you believe the balance is different than what is being calculated. To reset the balance to the calculated value simply delete the balance and click away.

 

The Ending Cash Position on each month represents the budgeted amount of cash at the end of each month.  This will be negative in months where the user is borrowing on a Short Term Notes Payable (that functions as a checking account).