Cash flow is one of the most important parts of any business. Taking the time to create and maintain an accurate cash flow can help you grow your business and save you money in the long term. Below, we delve into what a cash flow is, why you need it, and the benefits it can bring to your business.

What is a cash flow report?

Simply put, a cash flow report, also called a cash flow statement, is a financial statement that summarises the movement of cash and cash equivalents (assets/investments that can easily and quickly be turned into cash) that flow in and out of a company.

Cash flow reports provide a detailed picture of the amount of cash a business has going in and out during a specific period, and determine the probability of a business being able to pay any expenses due.

Cash flow reports can be prepared using Excel (although this is a time-consuming way to do it), or by using software such as “Float” or “Fathom” that can link in with your accounting software and pull out the relevant sales and expenses figures for the period.

What information do cash flows include?

Cash flow reports include the following to ensure all future liabilities (costs due to be paid by the company) are accounted for: