How We Perform Your Budgeted Cash Flow Statements
What is a Cash Flow Statement
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.
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 leftover from the previous you add it to the cumulative total.
Complete the Budgeted Cash Flow for the Rest of the Fiscal Year
As with most any 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 you 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.
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 How Much Cash Your Company Earns Every Month
Your cash flow statements 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.