This video shows how to create the Schedule of Expected Cash Collections.
The Schedule of Expected Cash Collections predicts when the company will collect cash from its sales. This is important when the company makes sales on credit, since not all of the sales made on credit will be collected in the same period in which the sale is made. For example, a company might collect 65% of its sales in the period of the sale and 35% of the sales in the next period. Thus, you would use this information, in conjunction with the Sales Budget, to prepare a Schedule of Expected Cash Collections so that the company’s executives would be able to plan the timing of cash receipts.