What does the cash report answer?
The question finance managers and owners ask most often is always the same: "Where is my money, and when will I get squeezed in the coming weeks?" READERP's cash report set answers it with three reports and a calendar.
- Liquidity position: Demand accounts, petty cash, blocked and time deposit balances, by currency. Blocked and time deposit balances aren't mixed in with usable cash; they are shown on separate lines.
- Daily cash calendar: Day-by-day flow of collections and payments by due date.
- Cash flow projection: A rolling projection for the coming weeks: receivables coming due, payables to be paid, checks and promissory notes, recurring outflows.
- Currency position: Net foreign-currency exposure by currency, with a record integrity check.
Why the direct method?
There are two ways to calculate cash flow. The indirect method starts from net profit and arrives at cash through changes in working capital. It is right for explaining the past, but it's no use for planning the next six weeks, because it doesn't tell you which collection will arrive on which day.
The direct method lines up collections and payments item by item, by due date. The weekly rolling cash flow, common practice in treasury, is built this way. READERP produces the projection with the direct method, from the real due dates in the ERP, not from an estimated average.
A check is not cash
A small but important detail: checks and notes receivable in collection don't count as money in the bank until they are collected. They are separate items on the balance sheet too. Adding them to the bank balance counts the same money twice, because the check already appears in the projection as an inflow on its due date. READERP makes this distinction inside the report.
The sneakiest error: foreign-currency accounts tracked in TRY
The invoice is issued in euros; the customer account is tracked in TRY. When the payment arrives, it is recorded in TRY at that day's rate. Every entry is correct for its own day, but the TRY balance sitting on the account doesn't show the money you will actually receive from the other party today. As the exchange rate moves, the gap grows, and that gap throws off any cash plan built from the account balance from start to finish.
READERP reads transactions in their own currency, calculates the rate implied by the account's own transactions, and builds the cash projection on the real foreign-currency exposure. The rate used isn't the market rate and isn't presented as such; the rate used is stated on every line.
How is it used?
The cash report opens in the panel or arrives in your inbox every Monday morning, noting what has changed since the previous week. We recommend reading it together with the receivables aging report to see who is paying late, and the cash conversion cycle report to see how many days your money is tied up. You can also just type your question: "Is there a cash shortfall in the next three weeks?" (plain-language questions).
Frequently asked questions
How many weeks ahead does the projection look?
It works on a weekly rolling window that moves forward one week every week. The window length is set to your needs.
Are recurring payments like salaries and taxes included in the projection?
Yes. Recurring outflows recorded in the ERP are included in the projection. If some items are tracked outside the ERP, we discuss how to add them during setup.
Can we see the cash of several companies together?
Yes. You can view the companies you are authorized for separately or together.
To stop building your cash table by hand, talk to us, or go back to the READERP page for general information.