Financial statements
Read the cash flow statement
See where cash came from and where it went in a period, split into operating, investing and financing activities, and reconcile it with your opening and closing cash.
2 min readLast updated
In this article
Profit and cash are not the same thing. A month can be profitable while the cash box empties, because customers have not paid yet or stock was bought in advance. The cash flow statement explains the change in your cash balance over a period.
Steps
Open Reports & Analytics › Accounting Reports › Cash Flow Statement. The page title is Cash flow.
Set the period in From and To.
Select Apply. The statement covers your current branch.
How to read it
The statement starts from net profit and adjusts it to cash (the indirect method). It has three sections, each with a total:
Section | What it shows |
|---|---|
Operating Activities | Net profit for the period, plus non-cash expenses such as depreciation, plus or minus the change in working capital: receivables, inventory, payables and accrued expenses. |
Investing Activities | Cash spent on fixed assets and investments, and cash received from selling them. |
Financing Activities | Loans received and repaid, capital contributed, dividends paid and owner withdrawals. |
The three results at the bottom tie the statement to your cash accounts:
Net Change in Cash: the sum of the three sections.
Opening Cash: the balance of your cash and bank accounts on the day before From.
Closing Cash: their balance on To.
Opening Cash plus Net Change in Cash should equal Closing Cash. A gap usually means a cash movement that the statement could not classify, for example a transfer posted to an account outside the standard groups.
How the signs work
A positive figure is cash coming in; a negative figure, in red, is cash going out. An increase in receivables or inventory is negative, because cash is tied up; an increase in payables is positive, because you have kept cash longer.
Export
Use Export Excel or Export PDF.
Common questions
Why is operating cash much lower than profit? Look at the working-capital lines. Growing receivables or stock are the usual reasons. The aged receivables report shows who owes you.
The report shows a message that the cash flow is unavailable. The statement depends on the standard structure of the chart of accounts. Ask your administrator to review the account groups.