Guidelines – ThinkOut—Cash Flow Management Platform

Guidelines

ThinkOut is an intuitive tool, so anyone can get around easily. There are some main ”principles” or guidelines if you want, that you need to follow when handling the business cash flow, no matter the tool you use. We pointed out the basics that will help you work with ThinkOut and get accustomed to cash flow management in general.

If, after browsing through this section, you still have questions, write to us at office@thinkout.io. We’ll help you gladly.

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Get Familiar With Cash Flow Management and ThinkOut

Organize Categories

Q: How can I organize the cash transactions?

A: The ”secret” to a useful cash flow plan is the way you organize it. No matter the type and size of the business you are running or the number of cash accounts you handle, there are some basic steps to stick to.

First of all, cash flow means money coming in and going out of your company (either from bank accounts or with physical money) as revenue and expenses. So your plan will have these two main categories (pre-set by ThinkOut) which subdivide into other categories, according to your company’s activity.

Organize Income by revenue type; group it by operations, recurrent income, financial placements, real estate etc. Going further, divide each group into revenue categories. For instance, for Operations you can organize it by client names and for Recurrent Transactions by service/product etc. For each you can go as in detail as you wish to.

In Finance you usually work with Fixed and Variable Expenses (Costs), which you can also apply to group your cash expenses. You can also add other groups like Salaries, Suppliers, Taxes (mind the different types of taxes: on salaries, income taxation, social and health contributions, VTA etc.). For each of these groups add categories that describe in detail what the expense is about. It will help you to know exactly where your money went and where you can cut costs from.

Categories

Currencies & Accounts

Q: Can I work with different currencies and bank accounts?

A: You can and we advise you to. Most companies operate with multiple bank accounts and various currencies. This often occurs when you have international clients and operations, so you may bill differently. On the ThinkOut platform your cash plans can reflect several separate accounts (bank accounts or the actual cash), implicitly various currency accounts. Just switch between currencies when you introduce the values, according to your bills.

Though we refer to the Euro, you can add as many currencies as you wish from the Settings section.

It is important to keep track of the movements in each account, to be aware of your money whereabouts, so to speak. This way you can learn in time where to cut expenses, which account can cover a cash gap in another and so on.

ThinkOut allows you to add as many accounts as you wish. You can visualize the cumulative values of all the accounts you introduced by choosing the All option from the Account tab on the main page.

Indicators

Q: What are the highlighted numbers on the left about?

A: The platform calculates and displays some main indicators that speak about the state of your cash flow at a given moment. They are the key to a good cash flow management, no matter the tool used. Let’s walk through them together:

Current balance: as the name says it, it’s the money you have at that very moment, according to the values you entered as Income and Expenses.

Receivables: it’s the revenue you should cash in (as forecasted and hasn’t entered your accounts yet) until the end of the month/week/day, depending on how detailed the plan view is.

Payables: it’s the opposite of the Receivables - the payments you haven’t yet made and are due by the end of the month/week/day, depending on how detailed the plan view is.

Zero Cash Date (ZCD): it’s the day everybody fears and nobody escapes from - the moment you run out of cash and you start sliding down the negative cash slope. We have an entire article about it on our blog. It is not as bad as it sounds, all companies face an hypothetic ZCD at some point. It is, however, an important indicator to keep you alert about your income exceeding the expenses and for how long you can function without cashing in.

Cash Flow Gap: strongly related to the Zero Cash Date, it points out the sum that you lack to get back on a positive cash flow once you hit “the ground”. It is calculated based on the minimum value at the end of the selected time range.

Indicators

Operate The Cash Flow

Q: How do I introduce values in the cash plan?

A: When working with cash flow data it is useful to know as many information as possible about each value you entered (what bill it corresponds to, when it was paid/cashed in etc). That’s why when you enter values on the ThinkOut cash plan, a table opens for each cell, where you need to write all the transactions for that particular date. The value displayed in the cash plan cell is the sum of the values entered in detail.

This feature helps you keep track of the money that came in and went out of your accounts. The more detailed the cash plan, the more accurate your forecasting will be and the easier to make operational business decisions.

History Log

Q: Can I have an overview of past cash operations?

A: Of course you can; it is important that you do. No matter the tool you use, when it comes to tracking your company’s cash transactions, you need to know what got paid or cashed in, which values were modified, especially when you work on the cash flow plan with several people.

ThinkOut makes it possible for you to check the transactions history log as often as you set it (daily/weekly/monthly). We’ll send you by email a summary of what and when was added/modified, so you can stay in control of your cash movements. This feature can be customized from the Settings section.

Data Export/Import

Q: How can I export/import my cash flow data?

A: We know that spreadsheets is the most preferred tool when it comes to operating with numbers. To make it easier for you to align the cash flow plan with other projects, we made it possible to export it in a .csv format.

Export

You can import an existing cash plan to another, newly created one. It is a feature meant especially for building scenarios. What it does is to copy and paste the categories and values of an already made cash plan; then you just change only those values that you expect to vary in the future. Good thing you don’t have to start all over again with the writing, isn’t it?