When money is planned in the business plan (calculated cash flow) and at the same time, according to the final accumulated balance for a certain period, a deficit is formed, then it must necessarily be covered by some additional inflow (for the same period) - usually loans. Deficit with proper planning cannot be (the project balance sheet will not be reduced then), and no one gives free money for business needs now (therefore loans) if the organization cannot reduce its current expenses.
But in this case, additional loans for the same period will generate interest (financial costs of current activities), thereby increasing the outflow of the same period. Ie, it turns out, there is again a deficit for the same period. As a result, this can happen indefinitely if the deficits covered will always form additional financial costs for the same period when loans are taken for these purposes.
To solve this issue, when planning cash flow, it is possible to postpone the repayment of accumulated interest for the use of these loans for a subsequent period.
This algorithmic approach when building a financial model allows you to correctly predict a deficit-free cash flow over the entire planning horizon.
