What is a bill?
When a vendor wants to collect money from you for services or goods provided, they send you a document that specifies what was provided, the date, payment terms, etc. On the vendor's side this document is referred to as an invoice, on your side (the customer) it is referred to as a bill.
So, bills represent money that you owe your vendors.
Read more about what a bill is on Accounting coach.
How are bills used on Cash Flow Frog?
On Cash Flow Frog bills refer to money that your business owes its vendors.
This balance is one of the main metrics that affect your forecast, hence it is shown at the top of the forecast page where it is always easily noticed.
Note that your Bills balance refers only to outstanding bills. When bills are paid cash goes out of your bank account, which is a part of your Cash on Hand.
How do bills affect your forecast?
Outstanding bills are added to your forecast as cash-out transactions that will take place on the bills' expected dates.
How does Cash Flow Frog calculate the Expected date?
The expected date is calculated based on your historical payment habits for each vendor, for example, if you usually pay a specific vendor 5 days after his due date Cash Flow Frog will automatically set all of his outstanding bills to be expected for payment as the due date + 5 days.
The expected dates rules can be edited in the settings as explained in the settings section below
Let's say you received a $10,000 bill, expected on January 20th. But you usually pay this specific vendor 5 days late, the bill will appear in your forecast as a $10,000 cash-out transaction on January 25th and affect your cash balance accordingly.
When you pay the bill, money is deducted from 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 bill is reflected on your past transactions and changes to your bank account balance are updated on your Cash on Hand.
How the software deals with overdue bills
The forecasting algorithm expects bills to be paid on their expected dates. So, when a bill due date arrives and its payment hasn't been made yet, the software pushes the expected date one day ahead, showing that the bill will be paid tomorrow.
Cash Flow Frog will indicate as seen below if the bill has been pushed forward.
This process repeats every day until one of these terms is met:
The bill was paid -
When the bill is paid the regular course of events takes place as described above.
You exclude the bill-
You may decide to exclude a bill for various reasons. For example, if you have a dispute.
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 bills because they are long overdue and most probably will not be paid.
How to edit bills?
Cash Flow Frog gives you the freedom to edit bills' data, in order to reflect changes that you think might happen, without affecting the original bills on your accounting software. Edit expected dates, details, amounts or even exclude specific bills from your forecast altogether.
For example, if you think that a bill 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 bills 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.
Decide how the software should refer to your bills:
Set expected payment date per vendor
This option allows you to decide when the software should expect your bills to be paid for each vendor, compared to their due date. For example, if usually, you pay a specific vendor early, you can set the expected date 5 days before the due date.
This option allows you to set the number of days each bill is pushed forward for bills' that the expected date has passed.
Automatically exclude overdue bills
This option allows you to set how many days after the due date the software should decide that an overdue bill is not likely to be paid and therefore exclude it from your forecast.