The Missing Link: Schedule of Cash Collections

Posted on by Cedar Creek CPA

What types of businesses need a schedule of cash collections?

  1. Businesses that extend credit terms to customers (ie: net 30)
  2. New businesses
  3. Businesses with low cash balances

A schedule of cash collections predicts when budgeted sales will ACTUALLY be received into a bank account so they can be entered into a cash flow forecast. This schedule improves:

  1. Accuracy of cash flow forecasts.
  2. Forces you to examine why you think collections will occur at certain time.
  3. Brings to your attention types of sales (ie: wholesale vs direct to consumer) that may not be benefiting your company.

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Published by Cedar Creek CPA

Clare Kelly, CPA lives with her family in Nelson B.C and has been a business owner in the Kootenays since 2008. She works to contribute her hardwon business knowledge and technical skills towards the improvement of the sustainability and resiliency of her community.

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