Entering a cash reserve for a future lump-sum payment Follow

In some cases, you may wish to represent a reserve of cash in your forecast, with the intention of using it for a large future expenditure. A long-term asset entry will work for this scenario.

In the example below, we're creating a reserve of $10,000, which will be held for the first 18-months of the business, and then spent. If you need to represent a cash reserve for installment payments, read Entering a cash reserve for future rent payments.

 

  1. In the Forecast tab, click Assets:
    forecast-menubar-new-assets.png
  2. On the Assets page, click the Add Asset button:
    cash-reserve-rent2.png
  3. Give this asset a name. Click Next to continue.
  4. Select One-time amount, and enter the amount you want to reserve. Select the month in which this reserve will begin. Click Next to continue:
    cash-reserve-expense1.png
  5. In the next overlay, select "Long term" as the asset type. For the useful life of the asset, select Forever (do not depreciate) from the pull-down menu:
    cash-reserve-expense2.png
  6. Lastly, indicate that you plan to resell this asset. That will be the point at which this cash is made available for the expenditure you need to make. Enter the full asset amount, and select the future month in which you need to use the cash:
    cash-reserve-expense3.png
Note: you may need to add more years of monthly detail to your forecast so that you can select the correct future month. If so, read Changing the forecast length and years of monthly detail.

 In the Cash Flow table below, the resale of this asset creates a positive cash flow in the future month where we need to make our expenditure:

cash-reserve-expense-table.png

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