v.5 General Ledger: Build a Monthly Statement of Cash Flow

Transcription

1 v.5 General Ledger: Build a Monthly Statement of Cash Flow (Course #V222) Presented by: Bill Ballou Shelby Training Manager 2018 Shelby Systems, Inc. Other brand and product names are trademarks or registered trademarks of the respective holders.

2 Objective The objective of this session is to discuss what a Statement of Cash Flow is, how to build a Monthly Statement of Cash Flow, and how this report is run in Shelby v.5. This session covers the following topics: Definition of a Statement of Cash Flow How a Statement of Cash Flow differs from a Statement of Financial Activities Statement of Cash Flow according to GAAP How to build and run a simple Statement of Cash Flow in Shelby v.5 Other options 2

3 What is a Statement of Cash Flow? The cash flow statement is derived from the income & expense statement and balance sheet transactions. If the income & expense statement is prepared under the accrual basis of accounting, the revenues reported may not have been collected they are receivables. Similarly, the expenses reported on the income & expense statement might not have been paid they are payables. The statement reports the cash received and disbursed during a specific period. This is determined by looking at three components by which cash enters and leaves a church/ministry: operations, investing, and financing. Not all transactions involve actual cash items e.g. depreciation. Adjustments need to be made because of transactions that determine changes in cash. Changes in accounts receivable Changes in pledges receivable Changes in fixed assets Changes in accounts payable Changes in accruals Changes in short- and long-term debt balances The amount of cash at the beginning of the month or year, plus or minus all revenue and disbursements reported in the cash flow statement, should equal the ending cash balance that is reported on the statement of financial position at the end of the month or year. 3

4 Options for Building a Statement of Cash Flow (Per GAAP) There are two methods of presenting cash flow from operations: Indirect Begins with the change in net assets for the period and adjusts backwards to reconcile the change in net cash flow from operations. Direct The statement starts by listing all sources of cash from operations during the period and deducts all operating outflows of cash to arrive at the net cash flow for operations. Non-profits are encouraged to use the direct method; thus, the statement is normally broken into three sections: 1. Operating Activities Any transactions that enter into the determination of the unrestricted net income are classified as operating activities. Cash receipts from: general fund contributions, interest income, activities income from registration fees, rental income, etc. Cash payments for: salaries & benefits, operations, facilities, ministry, interest, etc. 2. Investing Activities Any transactions for the acquisition or disposal of non-current assets. Cash provided by: sale of property or equipment, collection of loans from another entity, etc. Cash used to: purchase property, buildings or equipment; purchase securities; lending of cash to another entity; etc. 3. Financing Activities Any transactions involving borrowing from creditors (other than payment of interest) Cash provided by: borrowing from short-term or long-term creditors through lines of credit, notes, bonds, mortgages, etc. Cash used to retire debt 4

5 EXAMPLE OF A STATEMENT OF CASH FLOW PER GAAP 5

6 Step-by-Step Guide to Create a Simple Cash Flow Statement The following is a step-by-step guide for you to refer to once you have returned to your church (simple cash flow) The Cash Flow/Balance List is primarily used to print the current balances for each line for the report. A cash flow statement is generated if the report is set up properly. The cash account(s) are entered with a line type of Balance Opening, which prints the beginning balance of the period. All other accounts that affect the cash balance are linked as Detail Lines, which print the amounts for the current period. Because the Statement of Cash Flow is heavily dependent on your chart of accounts, the Cash Flow/Balance List report is found under the Special Reports tool. Because of this, you must create a Cash Flow Special Report Design before you run the report. Create the Cash Flow Special Report Design 1. Start Shelby Systems v Locate and select the General Ledger module. 3. Verify that you are using the correct company or change the company using the drop-down arrow on the company field located at the top of the General Ledger Home Base screen. 4. Select Reports -> Special Reports -> Special Report Design. 5. Click the New icon found on the toolbar in the top-left corner. 6. Type Cash Flow Report (simple) for your report name in the Title field. 6

7 Start with Opening Balances of Cash Accounts 1. Click the New icon while on the Special Report Setup screen. 2. Type 10 in the Line # field. 3. Choose Balance Opening using the drop-down arrow on the Line Type field. 4. Type Opening Balance for the description that identifies this activity in the Description field. 5. Make sure the Reverse sign when printing checkbox IS NOT SELECTED. 6. Enter the account number of the cash accounts in the grid below. (NOTE: Include additional lines for each cash account that you want to include in your report or group them together on one line by including multiple accounts on the screen shown below. If the account spans multiple funds, leave the Fund # field and Dept # field blank to include activity across funds. If you leave the Fund # field and/or the Dept # field blank, then you have to type the account numbers into the Account Low and Account High fields rather than use the drop-down arrows.) 7. Click the Apply button to save line 10 and keep the form open for the next line. 7

8 Track Income and Expense Activity 1. Type 20 in the Line # field. 2. Choose Detail using the drop-down arrow on the Line Type field. 3. Type Income for the description for this activity. 4. Select the Reverse sign when printing check box. 5. Enter a value for Fund # if you use funds. (NOTE: Leave this field blank if you wish to include all funds for the account number range on this row.) 6. Enter a value for Dept # if you use departments. (NOTE: Leave this field blank if you wish to include all departments for the account number range on this row.) 7. Enter the account number range for the income to be included on this report line. You are including all accounts from through Click the Apply button. 8

9 9. Type 30 in the Line # field. 10. Choose Detail using the drop-down arrow on the Line Type field. 11. Type Expense for the description of this activity. 12. Place a checkmark in the Reverse sign when printing field. 13. Enter a value for Fund # if you use funds. (NOTE: Leave this field blank if you wish to include all funds for the account number range on this row.) 14. Enter a value for Dept # if you use departments. (NOTE: Leave this field blank if you wish to include all departments for the account number range on this row.) 15. Enter the account number range for the expense to be included on this report line. You are including all accounts from through Click the Apply button. 9

10 Total Line 17. Type 40 in the Line # field. 18. Choose 5 Total Level for the Line Type using the drop-down arrow. 19. Type Net of Income & Expense for the description of this total line. 20. The Reverse sign when printing check box should NOT be selected. 21. Click the Apply button. 10

11 Track Asset, Liability, and Capital Activity 1. Type 50 in the Line # field. 2. Choose Detail using the drop-down arrow on the Line Type field. 3. Type Accounts Receivable Activity for the description of this activity. 4. Select the Reverse sign when printing check box. 5. Enter a value for Fund # if you use funds. (NOTE: Leave this field blank if you wish to include all funds for the account number range on this row.) 6. Enter a value for Dept # if you use departments. (NOTE: Leave this field blank if you wish to include all departments for the account number range on this row.) 7. Enter the account number for the Accounts Receivable to be included on this report line. You are including Accounts Receivable and Unapplied Cash through Click the Apply button. 11

12 9. Type 60 in the Line # field. 10. Choose Detail using the drop-down arrow on the Line Type field. 11. Type Accounts Payable and Liabilities Activity for the description of this activity. 12. Select the Reverse sign when printing check box. 13. Enter a value for Fund # if you use funds. (NOTE: Leave this field blank if you wish to include all funds for the account number range on this row.) 14. Enter a value for Dept # if you use departments. (NOTE: Leave this field blank if you wish to include all departments for the account number range on this row.) 15. Enter the account number for the Accounts Payable and other liability accounts to be included on this report line. You are including all Liability accounts through Click the Apply button. IT IS NOT RECOMMENDED THAT YOU POST DIRECTLY TO CAPITAL ACCOUNTS, BUT IF YOU DO, YOU NEED TO ADD THE FOLLOWING LINE TO THE REPORT. 12

13 17. Type 70 in the Line # field. 18. Choose Detail using the drop-down arrow on the Line Type field. 19. Type Direct Postings to Capital Accounts for the description of this activity. (NOTE: Any journal entries that post directly to a capital account are included by using this line.) 20. Select the Reverse sign when printing check box. 21. Enter a value for Fund # if you use funds. (NOTE: Leave this field blank if you wish to include all funds for the account number range on this row.) 22. Enter a value for Dept # if you use departments. (NOTE: Leave this field blank if you wish to include all departments for the account number range on this row.) 23. Enter the account number for the Capital Accounts to be included on this report line. You included all Capital Accounts Click the Apply button. 13

14 Create the Ending Balance Line for the Cash Accounts 1. Type 80 in the Line # field. 2. Choose 6 Total Level for the Line Type using the drop-down arrow. 3. Type Ending Balance for the description of this total line. 4. The Reverse sign when printing? check box should NOT be selected. 5. Click the OK button. 14

15 If you capitalize your purchases of Fixed Assets, you need to add a line to your Special Report. 1. Type 55 in the Line # Field. 2. Choose Detail using the drop-down arrow on the Line Type field. 3. Type Purchase of Property & Equipment for the description of this line. 4. Select the Reverse sign when printing? check box. 5. Enter a value for Fund # if you use funds. (NOTE: Leave this field blank if you wish to include all departments for the account number range on this row.) 6. Enter a value for Dept # if you use department. (NOTE: Leave this field blank if you wish to include all departments for the account number range on this row.) 7. Enter the account numbers for the Fixed Accounts to be included on this line. 15

16 Run the Cash Flow/Balance List Report 1. Return to the General Ledger Home Base screen and select Reports -> Special Reports -> Cash Flow/Balance List. 2. Click the Include/Exclude button. 16

17 3. Select the special report that you want to run from the list. 4. Choose the report period using the drop-down arrow on the Period to Print field. 5. Click the OK button. 17

18 NOTE: ALSO: Because you can only run this report against a single period and not year to date, you may wish to save the report output as a comma-delimited file that easily imports into Excel and build the year-to-date report there. After running each single-period report and saving it as a CSV file, import it into Excel and then copy and paste the column of actual activity into a master Excel spreadsheet with a column for each period. In ShelbyNext Financials, you have the option to select either current period or year to date. 18

19 Example: Create a Spreadsheet at beginning of the year and update each month from your special report. 19

20 Other Options to Consider: 1. Church as two funds It is very important to watch the chart of accounts so that accounts from both funds are included. 2. Separate Fund 1 and Fund 2 Income and Expenses. 20

21 Cash at the bottom of the report 21

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24 Cash Available Report How much cash is available for operations? Use Special Reports to design a Cash Available report. Watch those Temp-Restricted Capital Accounts. Hint: Run the report as a Balance Sheet. 24

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26 Financial Spreadsheet for Forecasts Use the Financial Spreadsheet report to project Cash Flow for the remainder of the year. From the Financial Spreadsheet dialog box select the Use actuals for closed periods? check box to replace budget columns with actual dollars if the month is marked as closed. This is only available for the Budget and Revised Budget options. Make sure your Ending Period is set to Audit if you are using period

27 Actual amounts print for closed periods, and Budget amounts print for open periods. 27

28 Bill Ballou Training Manager Shelby Systems Bill has been a part of the Shelby training team for over 19 years and trains on both v.5 and ShelbyNext. He greatly enjoys working with the gifted trainers on his team. Bill brings a vitality and life to training software and uses humor to help customers feel at ease with new ideas. He has helped dozens of churches find solutions to tracking financial and gifts information so they can do ministry more effectively. While Bill has been known to geek out over finding a new trick in Excel or in MS Reporting Services, his real excitement comes at that moment in training when he can see that a trainee has made a key connection and has that "ah-ha" moment light in his or her eyes. Bill worked for almost twenty years on staff at various churches, so he has an appreciation for the questions and challenges of many of our users.