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.

Invoice payment terms can vary since invoices don't necessarily have to be paid immediately. 

Read more about what an invoices 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 invoices affect your forecast

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

For example:
Let's say you completed a job for a client for which you have issued a $10,000 invoice, due on January 20th. The invoice will appear in your forecast as a $10,000 cash-in transaction on January 20th and affect your cash balance curve 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 due date. So, when an invoice's due date arrives and its payment hasn't been collected yet, the software pushes the due date one day ahead, showing that the invoice will be collected tomorrow. 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 due date, for when the system should automatically exclude invoices because they are long overdue and most probably will not be collected.
    This feature is still in beta and will soon be available to all users. 

How to edit invoices?

Invoices can be easily edited in the 'Edit scenario' popup. 

Please notice that editing invoices affects 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.

Invoice settings

Decide how the software should refer to your invoices:

  1. Exclude or include invoices in your forecast scenario
    This options allows you to exclude all of your invoices from the forecast. As a rule we strongly recommend to always include your invoices in the forecast, there are very few situations when invoices should be excluded.
  2. Set expected date rule
    This option allows you to decide when the software should expect your invoices to be collected, compared to their due date. For example, if usually your customers pay early, you can set the expected date 5 days before due date. 
  3. Automatically exclude long overdue invoices
    This option allows you to set how many days after due date the software should decide that an overdue invoice is not likely to be collected and therefore exclude it from your forecast.
    This feature is still in beta and will soon be available to all users. 

Edit invoices' data

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 expect date so that the forecast will show the payment coming in later.

Never be surprised by a change in cash flow again

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