Representing financing agreements issued to your staff or customers Follow

Some business models involve providing your customers with financing so they can buy your product or service. An auto sales business is a great example - you sell your customer a car, but you also arrange to loan him money for some of the purchase price. Then he pays you back over time, with interest.

To represent this kind of arrangement in your forecast, it helps to consider that business planning is very different from accounting. In your daily accounting, you'll want to represent the deep details of all the individual loans you've issued, their repayments, and the interest incurred. But in your forecast, you're taking a much broader view.

Entering customer financing in the forecast

To represent customer financing in your forecast, you'll need two different entries:

  • A standard revenue stream entry, representing the overall revenue from your sales. (To stick with our auto sales example, this entry would contain the full retail value of the cars you've forecast to sell.)
  • A second revenue stream entry, using the Revenue Only model, that represents your estimates of the total interest you'll earn each month (or year) on customer financing agreements. 

What about the customer loans themselves?

From a business planning standpoint, the details of individual loans just aren't meaningful. Money is going out and coming back in, but that doesn't represent any actual income or cost to your business.

The interest you earn on the loans, on the other hand, is your actual income. That's why it's the only part of the financing we represent in the forecast. 

Note: LivePlan doesn't have an automated calculator for your interest income. You can enter any amounts that represent your projections into your revenue stream. 

Certainly, customer financing can have an impact on your monthly cash flow. But detailed tracking of individual customer loans is outside the scope of LivePlan, and not usually necessary for future forecasting purposes. If you have a business model that requires more detail for cash flow forecasting, feel free to contact us for suggestions.


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