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.
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.
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.
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.