Cash Flow Statement

A cash flow statement is the net amount of cash and cash-equivalents being transferred into and out of a business. 

  • Positive cash flow indicates that a company is adding to its cash reserves, allowing it to reinvest in the company, pay out money to shareholders, or settle future debt payments.
  • Cash flow comes in three forms: operating, investing, and financing.
  • Operating cash flow includes all cash generated by a company’s main business activities.
  • Investing cash flow includes all purchases of capital assets and investments in other business ventures.
  • Financing cash flow includes all proceeds gained from issuing debt and equity as well as payments made by the company.

Cash Flow Rules

To structure your Cash Flow report, you need to first set up the rules for which accounts and journal entries are included in each section. Navigate to [d] General Ledger, then [u] Set Up, then [g] Cash Flow Rule Entry.

This entry screen will let you create report lines for the Cash Flow report, and map accounts to each report line.

cash flow categories
[d] General Ledger | [u] Set Up | [g] Cash Flow Rule Entry
Details

On the Details tab, you can add as many report lines as required to each of the report sections.

cash flow statement line

Valid report sections are:

  • Operating,
  • Financial,
  • Investing,
  • Add back to Net Income

The line number controls the sort order within the report section.

Net Income

The Net Income tab lets you select accounts that will be included in the Net Income portion of the report.

cash flow net income

Items selected to add back will initially be included in Net Income, and then removed for reporting purposes. The net income will be the same as if you didn’t include these accounts in the first place, but it allows you to demonstrate that you’ve intentionally excluded these amounts.

cash flow statement
[d] General Ledger | [h] Financial Statements | [d] Cash Flow
Report-Account Mappings

The last tab allows you to select which accounts will be reported under the Operating, Investing, and Financial sections of the Cash Flow report.

cash flow general ledger accounts
[d] General Ledger | [u] Set Up | [g] Cash Flow Rule Entry

Accounts can be assigned to a report section and report line. You can use the Change action to map additional accounts in, or to remove or change existing account mappings.

cash flow general ledger accounts
[d] General Ledger | [u] Set Up | [g] Cash Flow Rule Entry
cash flow general ledger accounts
[d] General Ledger | [u] Set Up | [g] Cash Flow Rule Entry

When you’ve selected the accounts to your satisfaction, you can click on the >> to create more space for editing your accounts.

cash flow general ledger accounts
[d] General Ledger | [u] Set Up | [g] Cash Flow Rule Entry

Select the appropriate report sections and lines, and hit <Apply> to save your changes.

cash flow general ledger accounts

This takes care of most of the cash flow report. You may also want to move portions of account amounts from one section of the report to another, without reassigning the entire account to the new section. You can do this by redirecting journal entry line items.

Journal Entries

Once journal entries are posted to the G/L, they can’t be changed. To circumvent this, the ‘F’ action (for cash Flow) will allow you to add a note to a journal entry line item, and redirect the amount to a new or different line in the Cash Flow statement.

Navigate to [d] General Ledger, then [c] Journal Entry.

The Journal Entry screen defaults to unprocessed journal entries, but you can search on processed items by blanking out the file type. Note that you can use the description field to search on both the description of the journal entry, any notes recorded on journal line items, or the cash flow report line.

journal entry
[d] General Ledger | [c] Journal Entry

When you’ve positioned on the journal entry you would like to redirect, use the ‘F’ action to modify the note, cash flow type and report line.

journal entry
[d] General Ledger | [c] Journal Entry
cash flow statement section
[d] General Ledger | [c] Journal Entry

Once you’ve selected a report section the line column will be enabled. Select the report line for this amount.

cash flow statement reporting line
[d] General Ledger | [c] Journal Entry

The amount for this line item will be moved from the section for the account it’s posted to, to the section you select to override that posting.

Cash Flow Report

Now we’ve identified how accounts will be reported, let’s take a closer look at the Cash Flow Report itself. Navigate to [d] General Ledger, then [h] Financial Statements, then [d] Cash Flow.

The Cash Flow report accepts the same parameters as the Balance Sheet and Earnings Statement, and remembers them if you run one report and then another.

[d] General Ledger | [h] Financial Statements | [d] Cash Flow
cash flow statement
[d] General Ledger | [h] Financial Statements | [d] Cash Flow

You can view the component amounts of any of the detail lines by double-clicking on the detail line.

cash flow statement
[d] General Ledger | [h] Financial Statements | [d] Cash Flow

If you want to see all the account balances and journal entries at the same time, you can export the Cash Flow report to an excel spreadsheet. The first tab of the spreadsheet shows the contents of the Cash Flow report itself.

excel export

The second tab is the account balances for the selected period, with a column to show which section of the report they map to.

excel export showing general ledger amounts

The third tab shows the journal entries, with columns for the original report section and the new section.

excel export showing journal entries

With these tools you can identify where you need to make adjustments to ensure your Cash Flow report is accurate.