Skip to main content
All CollectionsHow Does Cash Flow Frog Work?
What are invoices and how to use them?
What are invoices and how to use them?

All there is to know about how invoices are used on Cash Flow Frog and how they affect your forecast.

Ariel avatar
Written by Ariel
Updated over a week ago

What is an invoice?

When a business provides services or goods to a customer, it issues a document called an invoice. The invoice is a request for payment that indicates the details of the transaction that took place, what was provided, quantities, price, payment terms, etc.

Read more about what an invoice is on Xero or QuickBooks.

How are invoices used on Cash Flow Frog?

On Cash Flow Frog invoices represent money owed to you by your customers - Payments your customers have to make for services or goods you have provided them.

Your invoices balance is always easily noticed at the top of the forecast page.

Note that your Invoices balance refers only to outstanding invoices. Paid invoices represent payments that have already been deposited in your bank account, which is a part of your Cash on Hand.

How do invoices affect your forecast?

Outstanding invoices are added to your forecast as cash-in transactions that will take place on the invoices' expected dates. 

How does Cash Flow Frog calculate the Expected date?

The expected date is calculated based on each customer's historical payment habits, for example, if a customer usually pays 5 days after his due date Cash Flow Frog will automatically set all of his outstanding invoices to be expected for collection as due date + 5 days.

The expected dates rules can be edited in the settings as explained in the settings section below

For example:
Let's say you issued a $10,000 invoice, due on January 20th. but this specific customer usually paid 5 days late, the invoice will appear in your forecast as a $10,000 cash-in transaction on January 25th and affect your cash balance accordingly. 

When your client pays the invoice, money is deposited in your bank account. When you reconcile your bank account, changes to your balance are updated on your accounting software. The data is synced with Cash Flow Frog automatically, the invoice moves to your past transactions and changes to your bank account balance are updated on your Cash on Hand.

How the software deals with overdue invoices

The forecasting algorithm expects invoices to be collected on their expected dates. So, when an invoice's expected date arrives and its payment hasn't been collected yet, the software pushes the expected date one day ahead, showing that the invoice will be collected tomorrow.

Cash Flow Frog will indicate as seen below if the invoice has been pushed forward.

This process repeats every day until one of these terms is met:

  1. The invoice payment is collected -
    When the invoice is collected the regular course of events takes place as described above. 

  2. You exclude the invoice -
    You may decide to exclude an invoice for various reasons. For example, if you realize that the client is not going to pay.

  3. The due date reaches the limit you set -
    You can set a limit of x days after the due date, for when the system should automatically exclude invoices because they are long overdue and most probably will not be collected.

How to edit invoices?

Cash Flow Frog gives you the freedom to edit invoices' data, in order to reflect changes that you think might happen, without affecting the original invoices on your accounting software. Edit expected dates, details, amounts or even exclude specific invoices from your forecast altogether.

For example, if you think that an invoice payment is going to be made later than it is due, you can push the expected date so that the forecast will show the payment coming in later.

Please notice that editing invoices affect only the Scenario you are in and not all scenarios. As well, all edits on Cash Flow Frog affect only your forecast scenarios and never affect your accounting software data.

More Settings

Decide how the software should refer to your invoices:

  1. Set expected payment date per customer
    This option allows you to decide when the software should expect your invoices to be collected from each customer, compared to their due date. For example, if usually, your customers pay early, you can set the expected date 5 days before the due date.

  2. Overdue invoices
    This option allows you to set the number of days each invoice is pushed forward for invoices' that the expected date has passed.

  3. Automatically exclude overdue invoices
    This option allows you to set how many days after the due date the software should decide that an overdue invoice is not likely to be collected and therefore exclude it from your forecast.

Never be surprised by a change in cash flow again

Did this answer your question?