Cost of Sales
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Hi,
I purchased start up cashflow forecasting (though i need more functionality so will likely upgrade), i’m testing it out with my numbers and i’m impressed with how it works.
My questions are:
1) I had originally been doing this myself in separate excel spreadsheets and had actual cost of sales (as in the actual cost of the sales made) in each month in the Profit and lost, but the cashflow was more of a actual representation of spending, so instead of cost of sales, i had my actual stock purchases. Looking at this, i cannot input both of these things. Putting in actual cost of sales seems to make it work better, but then my cashflow isnt correct. How do i do this?
2) I’ll be gaining equity investment to start, and i wondered how this is input into the data sheet, as this needs to show in the balance sheet reserves, but also as income which i spend on stock etc?
3)I will be on flat rate Vat at 8% year one and move to 20% vat year 2 ( i realise i need to upgrades to do more than one years), how is this input? I’m assuming on the basis forecaster that i purchased, that it’s automatically working out 20% vat.
Thanks,
Hello Jenna,
The way Cash Forecaster works with regards to your questions:
1. Purchases, cost of sales and stock:
– Firstly, for purchases these are entered in the month these are purchased. They will appear in the profit and loss in the month of purchase.
– Against each line of purchase/supplier, you also set the credit terms you have with each supplier, so that the purchase appears in the correct month in the cash flow forecast too.
– Where any supplier is outstanding at a month end or year end this will show on the balance sheet too.
– The software then has entries for opening and closing stock, which will appear on the profit and loss account in the month you enter these.
– The net affect of opening stock, plus purchase, less closing stock will give you your cost of sales figure on the profit and loss.
– The closing stock figure will also be shown on the balance sheet in the appropriate month.2. Equity investment
Depending on what this represents, will depend on where you enter this, for example:
– If it’s a loan – enter in the loan section.
– If it’s a directors loan – enter this in the directors loan section.
– If from how you describe, it is an investment from yourself, enter this as either ‘capital introduced’ if you are a sole trader or partnership, or as additional ‘share capital’ if you are a limited company.In all the above scenarios the entries will be made in the forecasts. That is; there will be a cash introduction in the month you enter the cash investment, with an entry on the other side on the balance sheet depending on which method you choose from the above list.
– With regards to stock purchases, which the cash introduced is used for, this is a separate transaction. Follow the process in the explanation in point 1 above. In other words enter the purchase of stock in the relevant month.
3. Flat rate VAT at 8%:
At present Cash Forecaster doesn’t cater for the flat rate VAT scheme. All it caters for is for a VAT registered business, a non VAT registered business, or a business that registers for VAT during the cash flow forecast period.
There are so many variations for VAT that could be included and I will consider looking at this.
– But there would be a work around, where you could enter an extra sales line for the period whilst your business is on the flat rate of 8%. Enter 8% VAT rate on these sales and then in the month you change to the full 20% VAT rate, add another line of sales at the full rate of VAT.
– The problem with this is that you will also need to do the same with your purchases and overheads. This does get a bit messy then.However, I will put this on my list of possible upgrade options for the software.
If you have any further questions, please let me know.
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