After initial connection, Clockwork builds out an intelligent forecast that incorporates up to 3 years of financial data from your accounting source. However, you have the ability to dial in your forecast further by incorporating future information about your business such as initiatives, sales pipelines, information from your customers and vendors, and adjustments to your Balance Sheet.
Customizing Your Financial Model
In Clockwork's Financial Model, Assumptions allow you to create rules that override the intelligent forecast.
You can begin creating a new Assumption by clicking the "+ Add Assumption" above your Financial model, or by clicking into the cell for the corresponding account and time period where you'd like to start your new Assumption.
First, you'll want to make sure that your assumption is set to the correct date range. Then, you can select your Assumption type.
Currently, there are 4 different Assumption types to choose from:
% of Growth - This rule allows you to define a monthly, quarterly, or yearly rate of change that the account should grow by.
% of Account - This rule allows you to define a percentage by which the account will stay proportional to another account
Price x Quantity - This rule allows you to define a variable for price and quantity that will be multiplied
Custom Formula - This rule allows you to create your own variables which can be numbers, percentages, or dollar values that can be connected through arithmetic functions.
To ensure complete flexibility, we have made rules stackable within Assumptions. That means you can add, subtract, divide, and multiply these rules together to incorporate all future knowledge you have about your business.
Customizing Your Cash Flow Model
Your intelligent Cash Flow forecast is already very accurate out-of-the-box, because it incorporates both your Financial Model and company-specific invoice and bill timing. However, you can ensure your Cash Flow Model is completely up-to-date by managing overdue and upcoming invoices/bills and Balance Sheet entries.
Invoices Collected
If some of your forecasted revenues are not immediately collected as "Cash Revenue," in most cases that money is still going to be collected at a later date. Clockwork learns the typical payment behavior of your customers to project the timing of these future collections in the "Invoices collected" row.
Clockwork also looks at your real outstanding invoices (i.e. upcoming and overdue invoices sitting in your accounting system) to predict if/when those specific amounts will be collected. To review and adjust this portion of your cash flow forecast, simply click the "Invoices" button in the top-right of the Cash Flow Model, then click "edit" next to any upcoming or overdue invoice. You can edit both the "open balance" (the amount yet to be collected) and the "expected payment date." When you're done, hit "save" and the changes will be applied to your Cash Flow Model.
Bills Paid
Similarly, if some of your forecasted expenses are not immediately paid as "Cash expenses," in most cases you'll still pay those bills at a later date. Clockwork learns your typical bill payment behavior to project the timing of these future payments in the "Bills paid" row.
Clockwork also looks at your outstanding bills (i.e. upcoming and overdue bills sitting in your accounting system) to predict if/when those specific amounts will be paid. To review and adjust this portion of your cash flow forecast, simply click the "Bills" button in the top-right of the Cash Flow Model, then click "edit" next to any upcoming or overdue bills. You can edit both the "open balance" (the amount you expect to pay) and the "expected payment date." When you're done, hit "save" and the changes will be applied to your Cash Flow Model.
Other Cash In + Other Cash Out
If there is any balance sheet activity you'd like to capture in your cash flow forecast, such as an upcoming loan, investment, equity distribution, then you can expand "Other cash in" or "Other cash out" rows to enter those events directly into the model.
When hovering your cursor over any of the forecast cells for Assets, Liabilities, or Equity, you'll see a pencil icon appear. Simply double-click on the cell you'd like to edit, type the value you'd like to capture, and hit 'enter' (or click outside of the cell) to save your input.
Please note: Forecast cells in the "Other cash in" section only accept positive values, while the "Other cash out" section only accepts negative values. As an example, if you plan to take a $100 loan and purchase an asset for $75, you'd enter 100 in the "Liabilities" row under "Other cash in" (to represent the $100 cash inflow from the loan) and -75 in the "Asset" row under "Other cash out" (to represent the $75 of cash going out to purchase the asset).