Cash flow statement

The cash flow statement in QuickBooks helps you better manage your cash flow.

  • Overview

  • About cash flow statements

  • Cash flow statement template


    Manage your cash flow

    Many small businesses strive to get a better handle on money coming in and going out. This is where cash flow comes into play. QuickBooks tracks and organizes all your accounting data, and can generate your cash flow statement—so you always know how much money you have coming in to cover your bills.


    Make better business decisions

    Cash is essential to keeping your business financially stable and successful. Quickly generate your cash flow statement with QuickBooks, and you’ll get a clear view of your cash flow for any time period.


    Set yourself up for success

    The cash flow statement—along with the balance sheet and income statement—is one of the 3 key financial statements used to assess your company’s financial position. QuickBooks can generate all the reports you need to keep your business running smoothly. Even look back in time and predict your future cash flow.

Frequently asked questions

How do you define cash flow?

Cash flow is the amount of money flowing in and out of a business over a certain period. In other words, it refers to the increase or the decrease in the amount of cash held by a business.

Positive cash flow indicates that a business is liquid i.e. it can pay the bills, repay its debts and reinvest in the business.

Negative cash flow indicates a mismatch between expenditure and income. Ongoing negative cash flow can signal ineffective credit management, wastage or long-term loss, all of which can lead to business failure if left unchecked.

How is a cash flow statement prepared?

There are some key steps to preparing a direct cash flow statement:

  1. Gather data and receipts of your income and expenses, as detailed above in ‘What to include in a cash flow statement’.
  2. Use a self-created spreadsheet or a template to organise your data into a cash flow statement. Your entries will show cash incoming and outgoings each month for the reporting period of your cash flow statement.
  3. Record the totals of your cash incomings and outgoings over your reporting period.
  4. Total your total money going out and subtract from your total money going in. You’ll be left with an accurate view of your company’s cash flow for the period you’ve set.

How do you predict cash flow?

You can predict cash flow with a cash flow forecast. A cash flow forecast (also known as a cash flow projection) estimates your cash incomings and outgoings for future months.

A cash flow forecast template can be simple or complex depending on your business. However, at its most basic, it includes estimations for:

  • Future income from sales, investments and other income streams
  • Future expenses relating to the cost of goods sold
  • Future operating expenses

Cash flow forecasting can help predict cash flow for future periods using estimations based on historical sales and other data. However, it’s also important to update your cash flow statement with actual figures regularly so you can see how you’re tracking.

How do you calculate net cash flow?

Cash flow is calculated by subtracting total business expenditure from total income including sales, loans, investments and all other cash streams.

Using Excel or another program, you can create a spreadsheet using formulas to calculate your cash flow – i.e. total expenditure minus total income – or you can download our free cash flow statement template here.

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