Getting Started with Finmark’s Balance Sheet and Cash Flow Statements
Though you can work on the financial statements in any order, we recommend the following order to maximize efficiency:
Income Statement
Balance Sheet
Cash Flow
Please note that the Balance Sheet (“B/S”) and Cash Flow Statement (“CFS”) are intended to be used by advanced users who understand the intricacies of forecasting for these two statements. When you are already to work on your B/S or CFS, you can click on the Reports section in the navigation bar on the left:
Once in the Reports page, you can click on the “Balance Sheet” or “Cash Flow Statement” tab.
How the B/S and CFS Work
If you are connected to an accounting platform, the B/S will auto populate (see below). If you are not connected to an accounting platform, you are able to manually create your B/S. Regardless of whether you have a connected accounting platform, the CFS will need to be created by using simple formulas, similar to how formulas are used in Custom Variables (see this article: https://help.finmark.com/en/articles/5549603-what-are-custom-variables for more on custom variables).
B/S and CFS Terminology
Section - the highest level of hierarchy in the B/S and CFS. For the B/S, assets, liabilities and equity. For the CFS, operating activities, investing activities and financing activities.
Sub-section - below Sections and parent to Items. For example, short-term assets or debt issuances and repayments.
Items - specific elements of the B/S and CFS. For example, accounts payable and changes in fixed assets
Adjustments to Assets - a system item that ensures that the B/S will balance. This line is not editable
Total liabilities + equity - a line to verify that the balance sheet balances. This line is not editable
Net change in cash - a sum of the Sections of the CFS. This line is not editable
Cash, beginning of period - the total amount of cash at the end of the prior period. Users may edit the formula
Cash, end of period - the total amount of cash at the end of the current period. Users may edit the formula
Working with B/S and CFS
Sections are uneditable - they can’t be created, moved, renamed nor deleted. Their values will be the sum of all Items nested under them.
Subsections are editable. If you have a connected accounting platform, Subsections will usually be imported automatically. Regardless, Subsections can be created, renamed, deleted (if there are no Items nested under them) and in some cases moved. Their values will be the sum of all Items nested under them.
Items are editable. If you have a connected accounting platform, Items will usually be imported into the appropriate Subsections with values for historical periods (Actuals). Regardless, Items can be created, renamed, deleted and in some cases moved. Values can be overwritten and forecasts can be entered
Initial Views
Balance Sheet, Connected to Accounting Platform
What you will see: Sections, Subsections, Items (yours and Adjustments to Assets) for historical periods (Actuals) and Assets + Liabilities
Balance Sheet, Non-connected user
What you will see: Sections, Adjustments to Assets and Assets + Liabilities
Cash Flow Statement, All Users
What you will see: Sections, Net change in cash, Cash, Beginning Of Period and Cash, End Of Period
How to get started
Verify all Subsections in the B/S: appear, are organized under the correct Section and have the right name (connected users)
Verify all Items in the B/S: appear, are organized under the correct Subsection and have the right name (if a connected user)
Create Subsections and Items as needed
Create forecasts using similar methodology for Fx Variables (see this <article> https://help.finmark.com/en/articles/5549603-what-are-custom-variables?)
For Accounts Payable, Accounts Receivable, Deferred Revenue and Prepaid Expense, consider using the special formulas (see below)
Special B/S Formulas
Finmark users have the ability to specify the timing of cash receipts / payments in the Expense and Revenue sections. (See https://help.finmark.com/en/articles/5423212-invoice-timing-for-pricing-plans and https://help.finmark.com/en/articles/5406160-adding-editing-and-deleting-payment-collection-terms) Using these tools creates a significant amount of valuable data that can be quickly and simply leveraged when forecasting your balance sheet.
This information is applicable to Accounts Payable, Accounts Receivable, Deferred Revenue and Prepaid Assets.To utilize these special formulas, just click into the cell of the first forecasted period for one of these four accounts and then select the appropriate item from the dropdown list. You can then use the fill right feature to apply the same formula to future periods.