Budgets? Cash Flow & Income Statements? Balance Sheets? Help!! – Part Two Cash Flow Statements

Last week we looked at budgets and how they can make it easier to see where a business is heading.  This week we will look at the cash flow statement.  As the title suggests we follow the physical receiving and paying of cash in and out of the business. money

In an ideal world you have more cash coming in that you have to pay, however over the designated period you need to make sure your business has the cash to pay the bills that come due so it can continue to operate.

If for example you give your customers 30 days to pay you (no cash in) but during that time you need to pay wages to your employees (cash out) there is a going to be an issue.

(Your business name)
Statement of Cash Flows
For the year ended __ / __ / ____
Cash flow from operating activities
Receipts from customers 0
Payments to suppliers – 0
Payments to employees – 0
Interest payments/ received – 0
Taxes paid – 0
Net cash flow from operating activities Total of above figures
Cash flow from investing activities
Purchases/Sale of equipment or property 0
Net cash flow from investing activities Total of above figures
Cash flow from financing activities
Drawings/ investments 0
Payments of borrowings (repayment of principal) – 0
Net cash flow from financing activities Total of above figures
Net increase (decrease) in cash held Total of above 3 total figures
Cash at beginning of period 0
Cash at end of period Net increase   cash at beginning

This form is a little tricky to negotiate, however if you have completed your budget this isn’t that hard.  Stay with me now:

Income from budget minus any sales that are on an account.

Cash expenses as per the budget you have to actually pay for not just incurred including wages.

If you pay/receive interests add or minus the figure as required.


If you purchase or sell any equipment or property add or minus the figure here.

If you take money out of the business in drawings.

Pay for any loans (only the principle, the interest is in the first section.)

After this you figure out cash you had in the bank at the start of the period and then it will tell you what you have at the end.

Being able to view the cash statement allows you as a small business owner to see where you cash is going and how it is coming in. This knowledge is important for making monetary business decisions.  If this looks like a different language to you or if you just don’t want to spend your next 5 free hours trying to make this report give Open Bookkeeping a call 1300 257 117, we can help you.


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