account officer’s basic training procedures for filling up the cash flow template

ACCOUNT OFFICER’SBASIC TRAINING

Procedures for Filling Up the Cash Flow Template

Repayment Capacity Analysis FormsRepayment Capacity Analysis Forms

• Cash Flow Form

• Cash Flow Worksheets

How to use the Cash Flow Worksheets

The Cash Flow WorksheetsThe Cash Flow Worksheets

• Worksheet 1Worksheet 1 : Sales & Household Income/Expenses

• Worksheet 2.aWorksheet 2.a : Cost computation for Manufacturing/Processing

• Worksheet 2.bWorksheet 2.b : Cost computation for Retail Business

Worksheet 1 : Sales & Household Worksheet 1 : Sales & Household Income/ExpensesIncome/Expenses

• Data on business sales (broken down by frequency of sale)

• Data on household income (broken down as to source and frequency)

• Data on household expenses (broken down by time-frame, frequency and number)

SALES Worksheet

Month Catering Mini-grocery Business 3

Monday 17,000

Tuesday 37,800 18,000

Wednesday 37,800 17,000

Thursday 17,000

Friday 13,000

Saturday 37,800 20,000

Sunday 18,000

TOTAL 113,400 120,000

Average1/ 37,800 17,483

1/ : Sum of Daily Sales / No. of Operating days

HOUSEHOLD INCOME

Income Source Income Amount Frequency TOTAL

Salary 2,500 Semi-monthly 5,000

Remittance 4,000 Monthly 4,000

SSS Pension 3,000 Monthly 3,000

Laundry (wife) 300 Weekly 1,200

NOTE : Multiply Income amount by the indicated frequency

HOUSEHOLD EXPENSE

ExpenseNo. of

Units/PersonsUnit

ExpenseFrequency TOTAL

School Allowance 4 50 Daily (20dys) 4,000

Salary – maid 2 300 Weekly 2,400

Transportation 1 10 Daily (28dys) 280

Tuition Fee 4 500 Monthly 2,000

NOTE : Use this form for expense items involving more than one (1) unit/person and varied frequencies

Worksheet 2.a : ManufacturingWorksheet 2.a : Manufacturing

• Cost of raw materials used in manufacturing or processing

• In case of multiple product lines, the cost of each product must be presented separately.

• Total cost of raw materials are recorded in the Cash Flow under their designated time-frame columns

MANUFACTURING : (manufacturing, processing)

Mfg Worksheet : Lechon Manok

Raw Materials Cost/unit Quantity Total Cost

DAILY:

Liempo 50.00 8 400.00

Other Ingredients 190.00

Total 590.00

WEEKLY:

Dressed Chicken 75.00 185 13,875.00

NOTE : Present cost of raw materials by time frame (daily/weekly etc.)

Worksheet 2.b : Retail BusinessWorksheet 2.b : Retail Business

• Records data of purchase cost and selling price of the business’ top 5 fastest selling items

• Average price mark-ups are established

• Average price mark-ups may be compared to the industry to establish reliability of the information

• Price mark-ups may be used to determine cost of sales

RETAIL : (buy & sell, etc.)Retail Worksheet : Mini-Grocery

Product

PurchaseQuantity

Unit Selling Price

Cost Cost Price Mark-Up

(A) (B) A / B = C (D)(D/C)-1 x

100

Pop Cola 408.00 3 cases 5.67 7.00

Karne (baboy) 650.00 5 kgs. 130.00 150.00

LPG 640.00 2 tanks 320.00 345.00

Chicheria 162.50 50 packs 3.25 3.40

TOTAL 1,860.50 458.92 505.40

Ave. Price Mark-up ((Sum D/Sum C) - 1x100) 10.13%

Cost of Purchases : Mini-grocery

Average Daily Sales (A) 17,142.86

Average Price Mark-up (B) 10.13%

Cost of Sales [A / (1 + B)] 15,566.17

A = get data from SALES Worksheet

B = get data from Retail Worksheet

AOs Notes:

Data on Purchases for the Mini-grocery seems grossly understated. For conservatism, to

to establish cost of purchases the computed mark-up of 10.13% was applied to the lowest

reported daily sale of P13,000 to derive the adjusted cost of purchase -

13,000 / 1 + 0.1013 = 11,804.23

Filling up the Cash Flow

InstructionsInstructions

• As each step is presented, the lines/columns that have to be filled up are highlighted in “blue” and the text are in bold print.

• Lines highlighted in ““greengreen”” provide instructions/guidelines for computations

STEP 1STEP 1 : As you interview the applicant, write down income and expense data in their respective cells

Item Daily Weekly Semi-Monthly

Monthly MONTHLY TOTALS

Income from Business

Business 1 : Suman-Bibingka 1,000

Business 2 : Tricycle 200

Total Business Income

Business Expenses

Raw Materials Purchase

Business 1 : Suman-Bibingka 4,000

Business 2 :

Rent 6 60

Transportation Expense 10

Fuel (Tricycle) 70

Total Business Expense

NET BUSINESS INCOME

Item Daily Weekly Semi-Monthly Monthly MONTHLY TOTALS

Other Household Income

Salaries & Wages

Pension

Remittances

Total Other Household Income

Total Business & Household Income

Household Expenses

Food 200

Education & School Allowance 30

Utilities (Light & Water) 600

Medical Expenses 200

Other Expenses (Grocery & LPG) 2,000

Sub-Total

Miscellaneous (10%)

Total Household Expenses

NET BUSINESS & HOUSEHOLD INCOME

STEP 2STEP 2 : Compute for the MONTHLY TOTALS



Computing the Monthly Totals : (Daily x no. of operating days) + (Weekly x 4 weeks) + (Semi-monthly x 2 ) + (Monthly x 1)


Business 1 : Suman-Bibingka 1,000 (1000 x 28 days)

28,000

Business 2 : Tricycle 200 (200 x 28 days)

5,600

Total Business Income

Business Expenses


Business 1 : Suman-Bibingka 4,000 (4000 x 4 weeks)

16,000

Business 2 :

Rent 6 (6 x 28 days) (60 x 1 month) 60 228

Transportation Expense 10 (10 x 28 days) 280

Fuel (Tricycle) 70 (70 x 28 days) 1,960

Total Business Expense

NET BUSINESS INCOME



Salaries & Wages

Pension

Remittances



Household Expenses

Food 200 (200 x 28 days)

5,600

Education & School Allowance 30 (30 x 20 days) 600

Utilities (Light & Water) (600 x 1 month) 600 600

Medical Expenses (200 x 1 month) 200 200

Other Expenses (Grocery & LPG) (2000 x 1 month) 2,000 2,000

Sub-Total 9,000

Miscellaneous (10%)

Total Household Expenses


STEP 3STEP 3 : Compute the Totals and add the 10% provision for Miscellaneous Household Expense.




Business 1 : Suman-Bibingka 1,000 28,000

Business 2 : Tricycle 200 5,600

Total Business Income 1,200 33,600

Add figures vertically to get the SUM. Do not add the line TOTALS horizontally to get the SUM TOTAL under the MONTHLY TOTALS COLUMN – each column involves a different time frame, thus, the numbers will never add up.

Business Expenses



Business 2 :

Rent 6 60 228

Transportation Expense 10 280

Fuel (Tricycle) 70 1,960

Total Business Expense 86 4,000 60 18,468

NET BUSINESS INCOME



Salaries & Wages

Pension

Remittances



Household Expenses

Food 200 5,600

Education & School Allowance 30 600

Utilities (Light & Water) 600 600

Medical Expenses 200 200

Other Expenses (Grocery & LPG) 2,000 2,000

Sub-Total 230 2,800 9,000

Miscellaneous (10%) 23 280 900

Why add a 10% provision for Miscellaneous Household Expense? This is to cover for possible understatements in information on household expenses provided by the applicant, or errors in computation by the AO.

Total Household Expenses 253 3,080 9,900


STEP 4STEP 4 : Compute the NET BUSINESS INCOME by deducting Total Business Expense from Total Business Income





Business 2 : Tricycle 200 5,600

Total Business Income 1,200 33,600

Business Expenses



Business 2 :

Rent 6 60 228

Transportation Expense 10 280

Fuel (Tricycle) 70 1,960

Total Business Expense 86 4,000 60 18,468

NET BUSINESS INCOME 1,114 ( 4,000 ) ( 60 ) 15,132

STEP 5STEP 5 : Compute the TOTAL BUSINESS & HOUSEHOLD INCOME by adding Net Business Income and Other Household Income



NET BUSINESS INCOME 1,114 ( 4,000 ) ( 60 ) 15,132


Salaries & Wages

Pension

Remittances



1,114 ( 4,000 ) ( 60 ) 15,132

STEP 6STEP 6 : Compute the NET BUSINESS & HOUSEHOLD INCOME by deducting Total Household Expenses from Total Business & Household Income




1,114 ( 4,000 ) ( 60 ) 15,132

Household Expenses

Food 200 5,600

Education & School Allowance 30 600

Utilities (Light & Water) 600 600

Medical Expenses 200 200

Other Expenses (Grocery & LPG) 2,000 2,000

Sub-Total 230 2,800 9,000

Miscellaneous (10%) 23 280 900

Total Household Expenses 253 3,080 9,900


861 ( 4,000 ) ( 3,140 ) 5,232

27

Lending to Microenterprises without analyzing the cash flow …

… is like playing darts blind-folded. Determining how much loan the bank should give to a client is left to CHANCECHANCE.

Thank you!

account officer’s basic training procedures for filling up the cash flow template

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