How We Perform Your Budgeted Cash Flow Statements

What is a Cash Flow Statement

A budgeted cash flow statement is a more formal document than a cash budget. Cash flow statements need to follow FASB standards for public companies.

A cash flow statement tells what your cash amount will be at the end of the month and the beginning of the following month.

At EXCOL, we use special accounting software but this example gives you a clear and simplified image of how a cash flow statement looks like.

Example of a Budgeted Cash Flow Statement

How a Budgeted Cash Flow Statement Works

In a cash flow statement, you input all the sources of cash like operating activities, product sales/services, investments, and any other source of income your company has.

You add the inflow of cash and subtract the outflow of cash(expenses) to get the leftover cash for the quarter. If you have any cash left over from the previous you add it to the cumulative total.

1st quarter of a Budgeted Cash Flow Statement

Complete the Budgeted Cash Flow for the Rest of the Fiscal Year

As with most other financial tasks, you want to track by quarter and fiscal years. Complete the rest of the year, double-checking your math, making sure you added the cumulative cash flow properly, and then have a complete cash flow statement.

Ideally, you don’t want any debt or negative amounts of money, especially if you don’t have any savings. If you foresee periods of time where you’ll be losing money, look at different areas of your business for ways to earn or save more money.

Example of a complete cash flow statement with negative and positive balances throughout

Use Another Spreadsheet to Track Other Expenses

Before doing the cash flow statement you need to have an estimate of what your expenses are. Use the example of estimates of spending to guide and help you think of expenses you might have.

Remember to not underestimate expenses for as little as it may be. If you spend two cents on it, it’s an expense.

Know what your previous expenses have been for more accurate calculations in the future

Know How Much Cash Your Company Earns Every Month

Your cash flow statement’s primary goal is to tell you about the day-to-day of your business, it tells you only about transactions that generate cash, without confusing you with other numbers.

That’s what the other statements are for but the cash flow statement helps you stay focus on what’s necessary now for your business.