Cash Flow Learning Trail

Cash Flow Learning Trail

A: Revenue

Follow the links for explanations of the terms used in the cash flow forecast.

  Jan Feb Mar
Revenue      
Cash Sales 600 1200 1750
Debtors Payments 0 600 850
Total Revenue 600 1800 2600
       
Expenses      
Raw Materials 970 1200 1350
Wages 800 800 800
  220 220 220
Rates 40 40 40
Electricity 60 60 60
Travelling 80 80 150
Sundries 130 80 80
Exhibition Charges 150 150 250
Total 2450 2630 2950
       
Net Cash Flow -1850 -830 -350
       
Opening Balance 750 -1100 -1930
+ / - Net Cash Flow -1850 -830 -350
Closing Balance -1100 -1930 -2280


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Revenue is the income received by a business for goods sold or services provided. It is the cash flowing into a business. For GoodWood we see that it is sub divided into Cash Sales, and Debtors Payments.

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Cash sales occur when sales are made and payment is immediate. This payment can be by cash, cheque, or credit card. In all of these cases the money is immediately available for use by the business.

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Debtors Payments. Many businesses sell goods on credit; payment for the goods may not be due for 30 days or more. When goods are sold on credit a Debtor is created. We only enter the revenue from these sales. when payment is made.

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Total. This is the total revenue; all the payments received by a business within the time period, in this case January. This is the total of money flowing into the business. All of this is available for use by the business.

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