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Cash flow statement template in Excel

Cash flow measures the money flowing in and out of a business. It may measure flow of money at any given time and therefore it can be a daily cash flow, monthly cash flow or yearly cash flow. An ideal business cycle would ensure that there is always more cash flowing in than flowing out. However, in reality most businesses have to pay their suppliers and staff before they get paid themselves. This creates a lag in payments in and payments out that may pose a major challenge for businesses. How well the cash flow is managed is critical to the business’ long term sustainability as well as for the immediate financial health.

As the amount of money involved and the number of transactions grow, the task of managing cash flow increases in complexity. This also leads to a greater impact for the business in case that the cash flow is not managed well.

A sign of a healthy cash flow for a company is to always have cash available to pay the bills and wages on time. If a company is not able to do this, it can encounter a cash crisis that disrupts its operations and creates trouble accessing supplies, leading to a challenge in the capacity to generate revenue.

The cash inflows to a business can include:

· receipt of a bank loan

· shareholder investments

· payment for services or products from customers

· interest on investments and savings

· tax returns

Cash outflows can include:

· daily operating expenses, rents, and wages

· purchase of equipment, raw materials, or stock

· payroll tax, income tax, and other taxes

· loan repayments

· purchases of assets

The cash flow statement is used in financial accounting, in order to cash and cash equivalents are affected by changes in balance sheet accounts and income. This financial analysis can breaks down to financing, investing, and operating activities. The cash flow statement captures the operating results and the accompanying changes that take place in the balance sheet. The statement of cash flow is an analytical tool useful in determining the ability to pay bills and the short-term viability of a company.

Among the groups that may be interested in a cash flow statements are included: 

· Accounting personnel, who need to know whether the company is able to cover immediate expenses and payroll

· Potential contractors or employees, who want to know whether the company is able to pay them

· Shareholders of the business.

· Potential investors, who need to evaluate whether the business is financially stable

· Potential creditors or lenders, who need to know whether a company is able to repay its loans

Cash flow statements can be included in a business plan. Financial modeling based on a cash flow statement is critical in the process of valuation of a business. Making a correct cash flow statement as part of a company annual report requires a lot of accounting information. The financial analysts who has the task of creating the cash flow statement has to balance the cash and cash equivalents and the balance sheet in order to compute the figures.

How to make a cash flow statement template in Excel

A cash flow statement is among the most important financial tools for a company. As it tracks all the money flowing in and out of the business, the cash flow can reveal seasonal trends and payment cycles that require additional cash reserve in order to cover payments. This patterns or cycles can help business managers to plan ahead and ensure the company always has money to cover for its payments.

It is possible to use Excel software to create a cash flow statement template. In order to do that you have to list all your incoming and incoming cash flow in your company in dollar amounts for a certain period of time, which can be daily, monthly or yearly.

The Excel cash flow statement template should include:

· Opening balance

· Cash incoming

o Debtor receipts

o Asset sales

o Sales

o Other income

· Total incoming

· Cash outgoing

o Purchases (Stock etc)

o Advertising & marketing

o Solicitor fees

o Accountant fees

o Bank fees & charges

o Credit card fees

o Interest paid

o Rent & rates

o Utilities (water, gas, electricity, telephone)

o Lease/loan payments

o Motor vehicle expenses

o Stationery & printing

o Repairs & maintenance

o Membership & affiliation fees

o Insurance

o Licensing

o Superannuation

o Wages

o Income tax

· Total outgoing

· Monthly cash balance

· Closing balance

You need to ensure when preparing a cash flow statement that you clearly state whether the figures are GST exclusive or inclusive.

A cash flow statement can break down into three main categories: financing, investing, and operating activities.

Financing Activities

Financing activities include collecting money from investors, issuing and repurchasing stock, borrowing from creditors and repaying loans, and payment of cash dividends. This section of the cash flow statement is associated with the Owners’/Stockholders’ Equity and Long-Term Liabilities from the Balance Sheet.

Investing Activities

Investing activities include buying/selling investment securities, lending money to others and collecting the principal, as well as buying and selling assets like equipment and property. This section of the cash flow statement is associated in the balance sheet with the Long-Term Assets section.

Operating Activities

Operating activities are the day-to-day business like paying operating expenses, purchasing inventory, selling products, and paying wages. One of the most important lines of the statement is the Operations Net Cash Flow. In the balance sheet this section of the statement is associated with the Current Liabilities and Current Assets sections. In the Income Statement this section is associated with the Revenue and Expenses section.

The preparation of the cash flow statement requires that you have the records of all the cash transactions. The payments and receipts are categorized in the three categories above. A cash flow statement can also be created by using an indirect method based on the information in the income statement and the balance sheet.

There are various financial software tools that allow you to integrate the cash flow statement with other financial statements. The Excel workbook can include an integrated balance sheet, income statement, cash flow statement, operating details, financial ratios, and many more.

Daily cash flow statement template

In case that the company has many daily transactions in cash it is important to have a precise control over the daily cash receipts. A daily cash flow statement template in Excel can help you keep track of how much daily cash the business needs, and where the cash went each day. You can just fill in the cash amounts for the day in such an Excel template, and you will be alerted to any cash discrepancies that may be the result of accounting errors, theft, overlooked transactions, or mistakes when charging a customer. A daily cash flow statement will also notice you to any special daily transactions, such as cash paid out or cash received from non-sales sources.

Monthly cash flow statement template

A company may use a monthly cash flow statement template in order to list all the incoming and outgoing dollar amount of cash items during each month period. The cash items should be listed for each day and the total figures are listed under the headings Cash outgoing and Cash incoming.

Yearly cash flow statement template

The yearly cash flow statement template is important for the annual report of the company. On a yearly cash flow statement template you have to list all the incoming and outgoing dollar amounts of cash items for 12 months. You also have to list the items for each month and total the figures under the headings Cash outgoing and Cash incoming.

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