The Cash Flow Statement is an important document that provides details of actual cash required by your business on a daily, monthly and yearly basis.
It essentially provides insight into cash inflows and outflows of a company. Good cash flow management is critical to running a successful business. So it’s important to find effective ways of doing this to get an accurate picture of the true financial standing of your company.
A cash flow statement helps you highlight shortfalls in cash. It’s important to make sure that your company has enough money in the bank account for it to be able to pay all its bills.
One way of improving cash flow in your business, is by speeding up your cash inflows and by slowing down outflows within reason. Some ways you could do this is by billing regularly, chasing bad debt, managing stock effectively and by putting money away during peaks.
The cash flow statement is divided into three main sections, including:
- Operating activities- these make up day-to-day business activities.
- Investing activities- this includes the buying and selling of assets.
- Financing activities- this involves borrowing from creditors and repaying loans.
Here is an example of a cash flow statement template:
|Monthly Cashflow Forecast|
|Year Ended XX/XX/XX||Month||Month||Month||Month|
|Cash collected from debtors||0|
|Loan or other cash introduced||0|
|Sales of assets||0|
|Total cash inflow||0||0||0||0||0|
|Cash cost of sales|
|Total cost of sales||0||0||0||0||0|
|Repairs and maintenance||0|
|Advertising & promotions||0|
|Cash capital payments|
|Total capital payments||0||0||0||0||0|
|Total cash outflow||0||0||0||0||0|
|Net cash receipts/(expenditure)||0||0||0||0|