Start a new topic

A non-cash Component that is visible in the P&L

I know that this sounds like a silly idea in a cashflow forecast, but bear with me!  


Imagine a business with several outlets or manufacturing plants and a central service function.  The central function supplies goods or services to the outlets.  A cashflow forecast for each individual outlet wouldn't show this line (or would show it with zero value because no money changes hands: the company only has one current bank account).  But the P&L forecast should show a cost to the outlet and an income to the central function.  As far as I can see, there isn't an appropriate Component in Brixx.


There is a parallel with depreciation, which shows in the P&L but not as cash.


That makes sense to me. It's certainly possible we just need to decide upon the best way to execute it. 


We could add a tick box to the existing income/cost components that would mean the numbers only post to the P&L. 


Alternatively, I can imagine a simple new component which might be called 'Cash transfer' (I'm sure there is probably a better name than this). This component would have one input for data like any other cost or income component. This would add an income to your P&L report as well as an identical cost too but nothing to your cash flow. This would be appropriate for a combined forecast with the central service and all outlets in one plan, showing the movement of cash between outlets but no actual change in the overall cash of the business.


What do you think? 

I think that the second idea (a dedicated component) is the better one.  It's a cross-charge between departments.  Would that be an appropriate name?


Would it be a component in the charging department or the charged department?


I'm struggling without that component at moment.

Cross-charge sounds better. 


I think the problem might be that if the cost/income part are handled in one component then where ever you place it in your plan, you'll see both the income and cost assigned to that group in your reports. Of course, it can be re-named something appropriate so that it's clear what is going on so it's probably fine like this. The user could choose whether they put it in the charging department or the charged department (or a completely separate section the user creates just for handling cross charges perhaps?). 


Alternative functionality could be to choose whether this Cross-charge is the cost or income part and then add two components to your plan in both departments. Or the component has a dropdown to select another department in your plan that the cost/income part applies to. This might be overkill but probably worth exploring at this stage. 


Login or Signup to post a comment