Prepaid expenses

Prepaid ExpensesWorking Capital
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Mohammad Algammal 1 X 0
MA
Prepaid expenses

Dear Modano community, hope you are all well!

I wanted to hear from you what have you found to be the best approach to represent prepaid expenses from the current existing templates? Is there a way? For me I insert it as a user defined module similar to CAPEX + depreciation representation, but I thought there must be an easier way for sure from the existing templates that we have on the Modano library.

 

Thank you so much,

Gammal

James Longden A+ 103

Hi Gammal,

That's a really smart approach, leveraging the capex + depreciation structure / mechanism.

We typically assume that the modelling of the income statement is correct / complete, and that the prepayment mechanics are then a cash flow statement v balance sheet differential over the top.

The attached is an example module that you can insert straight into a monthly historical-forecast model. This module will link in all of the expenses, allow you to scale up a number of prepayment categories and enter the number of applicable months' prepaid against each. The module insertion will automatically add a new other current asset into the historical balance sheet.

This is beta content, so please review the outputs (we've used on engagements, so happy with performance). Any thoughts on the module would be great - layout, ease of use, mechanics, etc.

I've also attached a working model with the module used in situ (see image, below).

In terms of the existing content, a general option is to replace the standard Other Balance Sheet Items module for the following. This module allows you to take other balance sheet items and set their movement against both income statement and cash flow items (the standard module is cash flow only).  
This is a good general option but you would need to work out the amounts. However, the attached prepayment module has a more logical assumption layout (months' prepaid) and mechanics.
What time series are you using by the way? We have a few other structural pieces that I'd be happy to share on this thread.
Cheers. J.
Mohammad Algammal 1 X 0
MA

Thank you so much for the very helpful answer, James, and for sharing the beta content with me. I really like how the attached module is structured.

To answer your question I use the Generic model, forecast only model most of the time. Thank you for offering to send other structural pieces and if you have a match I would really appreciate it.

 

 

James Longden A+ 103

Thanks Mohammad. Is that monthly forecast-only?

Or do you use quarterly, annual, etc. as well?

Mohammad Algammal 1 X 0
MA

Yes it is monthly forecast only. I do use the annual summary module as well.

Thank you so much, James

James Longden A+ 103

Great. Attached are a set of five different total-only modules, Mohammad.

These are for the monthly forecast-only content and will interact with all charts of account.

The description of each file will show you the exact impact it will have. These are simpler in mechanics that the previous module - a more specific computational tool.

Again, this is beta content, so any feedback on process of use, model impact, etc. would be great.

Cheers. J.

Mohammad Algammal 1 X 0
MA
Thank you so much, James. I really appreciate it
blakem X 1
BM

James did the beta versions of these progress or are they still customisation to models?