The software is based on Inflows and Outflows. With Income used to model any of your client's inflows, and Goals used to model their outflows. Some examples of inflows are payroll, social security, pensions, and the sale of assets. Some examples of outflows are expenses, expenditures, or retirement spending needs.
The primary objective of a Goals-Based plan is simply to satisfy your client's Goals. On the cash flow report that is labelled as the Total Net Goals and Fees (column 5). To satisfy / pay for these Goals the system by default will follow the order of: 1. Total Net Income (column 4) 2. RMDs, 3. Gross Taxable Distributions (column 7), 4. Gross Tax-Deferred Distributions (column 8), and lastly 5. Tax-Exempt Distributions (column 9).
Note: There may be certain situations where you would rather see the source of funds follow a different order of withdrawals. You can change the system's order using Account Specific Withdrawals to select which accounts you want to satisfy the goals in a given year.
The Beginning Portfolio Value (column 3) in Year 1 (2018 for example) is just the value of all the accounts added together. Anything taken out of 1. Taxable Accounts (column 7), 2. Tax-Deferred Accounts (column 8), or 3. Tax-Exempt Accounts (column 9) will reduce this value. Any contributions or excess income will increase this value. The Simulated Net Return (column 13) is based on the allocation model chosen for this plan and will also change this value.
Here is an article for a complete breakdown of the cash flow report. Scroll down to Report Output: