Do you have enough cash to keep going?

Profit doesn't pay the bills. Cash does. The Cash Flow Statement shows exactly how money moves in and out of your business over a period of time. It answers the critical question that every business owner needs to know: do I have enough cash to cover my obligations?

This report is essential because a business can be profitable on paper but still run out of cash. If your customers are slow to pay or you've invested heavily in equipment, your bank account might be empty even when your Profit & Loss shows healthy earnings.

Why the Cash Flow Statement Matters

Business owners use this report to:

• Monitor liquidity by seeing exactly how much cash is available at any point in time
• Plan ahead by identifying months when cash tends to run low
• Understand cash sources by seeing whether cash comes from operations, investments, or financing
• Spot warning signs early if operating activities consistently consume more cash than they generate
• Support funding requests as lenders want to see that your business generates enough cash to repay loans

Accessing the Report

To view your Cash Flow Statement, navigate to Finance → Reports and select Cash Flow Statement.

At the top of the report, you can select your date range:

• 2025 or 2024 for quick access to full-year data
• Custom to select any date range you need

Use the Download button in the top right corner to export the report for your records or to share with your accountant.

Cash Basis Reporting

At the bottom of the report, you'll notice it says Cash Basis. Unlike the Profit & Loss which uses accrual accounting (recording income when invoiced), the Cash Flow Statement only counts money when it actually moves. An invoice doesn't appear here until the customer pays it. An expense doesn't appear until you've paid the bill.

This is why the Cash Flow Statement often tells a different story than the Profit & Loss, and why you need both reports to understand your business fully.

Understanding the Report Structure

The Cash Flow Statement is organised into three sections based on the type of activity that generated or used the cash. Each section ends with a net total, and all three combine to show your overall cash movement.

Operating Activities

This section shows cash generated or spent through your day-to-day business operations. It's the most important section because it reveals whether your core business activities are generating cash.

• Receipts from customers is the cash you've actually collected from customer payments during the period
• Payments to suppliers and employees is the cash you've paid out for operating costs like wages, rent, supplies, and vendor bills
• Cash receipts from other operating activities includes any other operating cash that doesn't fit the above categories

The Net Cash Flows from Operating Activities line shows whether your operations are cash-positive or cash-negative. A healthy business should consistently generate positive cash flow from operations.

Investing Activities

This section shows cash spent on or received from long-term investments in your business.

• Payment for property, plant and equipment is cash spent on fixed assets like equipment, vehicles, or machinery

The Net Cash Flows from Investing Activities is typically negative for growing businesses because you're spending cash to acquire assets. A positive number here usually means you've sold assets.

Financing Activities

This section shows cash movement related to borrowing and repaying debt.

• Loan proceeds is cash received when you take out a new loan or draw on existing credit
• Loan repayments is cash paid to reduce your loan balances

The Net Cash Flows from Financing Activities shows your net borrowing or repayment for the period. A positive number means you borrowed more than you repaid. A negative number means you paid down more debt than you took on.

Net Cash Flows

This line adds up all three activity sections:

Operating + Investing + Financing = Net Cash Flows

A positive Net Cash Flows means your cash position improved during the period. A negative number means cash decreased.

Cash and Cash Equivalents

The final section reconciles your cash movement with your actual bank balance:

• Cash and cash equivalents at beginning of period shows how much cash you started with
• Net change in cash for period matches the Net Cash Flows calculated above
• Cash and cash equivalents at end of period shows your closing cash balance

This closing balance should match the Cash and Cash Equivalents figure on your Balance Sheet for the same date.

Reading the Numbers

Numbers in parentheses represent cash going out. For example, (505,183.84) under Payments to suppliers and employees means you paid that amount to others.

Positive numbers without parentheses represent cash coming in. For example, 651,900.00 under Receipts from customers means you collected that amount from customers.

How to Use This Report

Monthly review: Check your cash flow monthly alongside your Profit & Loss. If profit is high but cash flow is low, investigate why. Common causes include slow-paying customers or large asset purchases.

Seasonal planning: If you notice cash dips during certain months, plan ahead by building reserves or arranging credit facilities before you need them.

Operating focus: Pay special attention to Net Cash Flows from Operating Activities. This is the engine of your business. Positive operating cash flow means your business can sustain itself without relying on loans or asset sales.

Debt sustainability: If you're borrowing money (positive financing activities), make sure your operating cash flow is strong enough to handle the repayments in future periods.

Frequently Asked Questions

What's Next?

Now that you understand your Cash Flow Statement, explore these related reports:

• Profit & Loss Statement to compare cash flow with profitability
• Accounts Receivable Aging to see how much cash is tied up in unpaid invoices
• Balance Sheet to verify your ending cash position