In this article, you will learn:
How to set up Custom Cashflow Forecasting
Custom cashflow forecasting is set up directly in the Jobs > Job Financials > Cashflow Setup or, to simplify the process, in your Job Template(s). Custom cashflow forecasting is based on schedule items and their completion status.
⚠️When you don't complete the cashflow setup, JACK App applies default settings to show you a cashflow forecast with a relative amount of accuracy. These are explained below depending on the type of job.
1. Billing, Invoicing Settings & your Cashflow
Regardless of whether you decide to use the custom cashflow or default cashflow, you must complete the cashflow setup in Settings > Cashflow Setup.
Set the following items that must be completed:
Default Bill Payment Terms: Set the number of days and trigger to estimate when supplier/contractor bills will be due for payment. Invoice trigger can be 'schedule item complete' or the 'end of the month', and terms are set in days.
I.e., how many days after an item is marked completed is the bill due?Default Invoice Payment Terms: This is the number of days you typically give your customers to pay their invoices.
Target Markup: This is the markup you aim to achieve across all jobs. Not to be confused with the builders' margin.
I.e., a Markup of 33% results in a 25% builders margin.
Cost-Plus Frequency: Set the frequency at which cost-plus jobs are invoiced.
2. Default Cashflow Settings for Cost-plus Jobs
For a cost-plus job with no cashflow setup completed, JACK will take the expected total costs and spread the cash outflows evenly over the job duration. The job duration will be calculated using the start date of the first schedule item and the end date of the last schedule item, 60+ days for default supplier/subcontractor payment terms.
The cash inflow will be estimated using the default invoice payment terms and will also take into account your target markup.
When no client invoices have been created or scheduled, JACK will evenly distribute the total remaining contract value & variations across the duration of the project. The schedule start and end dates determine the duration, or if you have no schedule, the default project duration in your settings will apply.
3. Default Cashflow Settings for Fixed-price and Percentage-complete Jobs
For a fixed-price job with no cashflow setup completed, JACK will take the expected total costs and spread the cash outflows evenly over the job duration. The job duration will be calculated using the start date of the first schedule item, and the end date of the last schedule item, 60+ days for default supplier/subcontractor payment terms.
If you don't have scheduled progress claim invoices set up, cash inflows will be evenly distributed across the project's duration. The schedule determines the duration; if there is no schedule, the default project duration in your settings will apply.
For more accurate cashflow forecasting, set up & schedule draft client invoices.
Percentage-complete jobs are managed the same way as fixed-price jobs, with the only difference being how client invoices are created using a percentage of the total contract value rather than a fixed dollar amount.
