> ## Documentation Index
> Fetch the complete documentation index at: https://docs.francis.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Fix a failing CF validation

> How Francis validates your cash flow statement and how to troubleshoot a failing check for actuals and forecast months.

Francis validates your cash flow statement by comparing the ending cash balance on the statement to the cash asset account from your accounting system. A passing check for actuals gives strong confidence that the cash flow statement is set up correctly, and that the forecast is built on solid foundations.

## How the check works

Francis subtracts the ending balance on the cash asset line item (mapped to your GL) from the ending cash on the cash flow statement:

```
round("Balance sheet"."Assets"."Current assets"."Cash"[0] - "Cash end period"[0]) # Should return zero
```

A non-zero result means either the cash flow statement is structured incorrectly, or there is an issue in your bookkeeping data.

## Check fails for actuals months

Work through these steps in order. The earlier steps catch structural errors; the later steps catch journal-entry-level issues.

### P\&L and balance sheet prerequisites

<Steps>
  <Step title="Check account mappings">
    Have all P\&L and balance sheet accounts been mapped? The cash flow statement depends on these mappings.
  </Step>

  <Step title="Check for manual overrides">
    Are there manual overrides in the P\&L or balance sheet that cause calculated values to diverge from your accounting system?
  </Step>

  <Step title="Check P&L subtotals">
    Are the P\&L subtotals set up correctly, producing an accurate net profit line? This line feeds directly into the cash flow statement.
  </Step>

  <Step title="Resolve the BS check first">
    Is the balance sheet check passing? [Resolve that first.](/masterclasses/budgeting-forecasting/bs-forecasting/bs-validation)
  </Step>

  <Step title="Check for non-GL line items">
    Does the P\&L or balance sheet contain line items with values not sourced from your accounting system?
  </Step>
</Steps>

### Cash flow statement line items

<Steps>
  <Step title="Confirm all cash movements are included">
    Are all line items that represent cash movements included in the cash flow statement?
  </Step>

  <Step title="Confirm non-cash items are excluded">
    Are all non-cash line items excluded? Common items incorrectly included:

    * Depreciation (P\&L) and accumulated depreciation (contra-asset)
    * Income from subsidiaries (P\&L) and investment in subsidiaries (asset)
  </Step>

  <Step title="Check multi-currency adjustments">
    If you use multiple currencies, have you made the relevant adjustments? [See the Currency integration.](/integrations/other/currency)
  </Step>
</Steps>

### Cash flow statement formulas

<Steps>
  <Step title="Check for missing formulas">
    Are any formulas missing? Check for cells that are blank where a formula should be.
  </Step>

  <Step title="Check signs">
    Are the signs correct? Asset formulas need a minus sign; liability and equity formulas need a plus sign. An increase in liabilities or equity means you've gained or kept liquidity. An increase in assets means you've tied up liquidity.
  </Step>

  <Step title="Check balance sheet movement deltas">
    Are balance sheet movement deltas set up correctly (this period minus previous period)?
  </Step>
</Steps>

### Journal entries

<Steps>
  <Step title="Check for cash journals in non-cash lines">
    Have any cash journal entries been posted to non-cash line items, causing them to be excluded from the cash flow statement? Look for journal entry descriptions that suggest cash activity: *invoice allocation*, *expense*.
  </Step>

  <Step title="Check for non-cash journals in cash lines">
    Have any non-cash journal entries been posted to cash line items, causing them to be incorrectly included? Look for descriptions that indicate non-cash activity: *depreciation*, *subsidiary*, *adjustment entry*.
  </Step>
</Steps>

<Note>
  If the check is off in only one or a few months rather than consistently, the issue is likely a specific journal entry rather than a structural error.
</Note>

## Check fails for forecast months

Forecast the cash asset line item by referencing ending cash on the cash flow statement. This links the two statements together, a method called using cash as a plug. [See this guide.](/masterclasses/budgeting-forecasting/cf-forecasting/cf-fundamentals)

When the cash asset value equals ending cash on the cash flow statement, the check is always zero.