Based on what you have defined in the Parameters form and the Project Contract Details form, you can forecast the cash flow of a selected project. For example, if the project date is March 5, 2007 and you invoice on March 31, 2007, you can forecast the Due dateand the Expected sales payment date.

• Project date- March 5, 2007.

• Invoice date- March 31, 2007 - This date is determined when you set up invoice frequency on the project contract form. In this example, the invoice frequency is set to the current month which means that all transactions posted in the month of March are invoiced on the last day of the month or March 31, 2007.

• Due date- April 14, 2007 - This date is determined by what you select for the Terms of paymentin the Project contractsform for this project. The example here is using a Due dateof 14 days. Adding the 14 days to the invoice date results in a Due dateof April 14, 2007.

• Expected sales payment date- April 27, 2007 - This date is determined by adding the Buffer days on Sales payment, which is determined in the Parametersform, to the Individual buffer daysdays, which is defined on the Project contractsform and then adding the total to the Due date. So if you have three Buffer days on Sales paymentset in the Parametersform and ten Individual buffer daysdays set in the Project contractsform, a total of 13 days should be added to the Due dateto find the Expected sales payment date.

Buffer days on Sales paymentare set in the Parametersform and can be used either as a replacement for the Individual buffer daysdays, or in conjunction. If you are using the Buffer days on Sales paymentas a replacement, you can calculate the average number of days between the Due dateand the actual payment date calculated for customers.

If you use the Buffer days on Sales paymentin conjunction with the Individual buffer daysdays, the number of Buffer days on Sales paymentis often calculated from the delay in payment between when the payment is sent from the customer and when the payment is received by your company.

Individual buffer daysdays are set up on the Project contractsform. The days are calculated based on both the sales Due dateand your companies experience with the customer's payment pattern.

Actual cash in flow is quite similar to forecasting except that you can begin your calculations from the first Invoice date. For example,

• Invoice date- March 2, 2007.

• Due date- March 16, 2007 - with Terms of paymentset to 14 days.

• Expected sales payment date- March 29, 2007 - with Buffer days on Sales paymentset to three days and Individual buffer daysdays set to ten days.

Based on what you have defined in the Parametersform, the Cost payment datecan be different than the Project date. When this is the case, the Cost payment dateis calculated by adding the Project dateand the Terms of paymentthat have been set in the Parametersform.

For example, if the Project dateof the transaction is March 5, 2007 and you have set the following Terms of payment:

• Hours - Current month (M)

• Expenses - 14 days (D14)

• Items - 30 days (D30)

• Then the Cost payment datewill be:

• Hours - March 31, 2007

• Expenses - March 19, 2007

• Items - April 4, 2007

Note
The Due datefor a purchase order does not follow the setup in the Parametersform. Instead, the Due dateis based on the vendor transaction when the project purchase order is created.

The Cost payment dateis not calculated with buffer days as the Expected sales payment dateis. When a project is finished and all costing and invoicing is complete, both the cost and the sales will be posted to the Profit & lossaccounts.

When all sales and vendor invoices are completed, the relationship between the Project statements form and the Cash flow form can be seen:

• Cash Inflows- Revenue

• Cash Outflows- Total cost

• Net Cash Flows- Gross margin