How to set up a cash flow statement

A cash flow statement tracks all the money flowing in and out of your business. Use it to find payment cycles or seasonal trends when you need additional cash for payments. This can help you plan ahead and make sure you always have money to cover payments.

For each year, you'll need to fill in actual or estimated figures against each of the below items. If you use estimated costs, you’ll need to label and justify them clearly.

You'll also need to clearly state on your cash flow statement whether your figures are GST inclusive or exclusive.

Opening balance

In the first month this will be your opening bank balance. In subsequent months it will be the closing balance from the previous month.

Cash incoming

Cash incoming is money that is flowing into the business. If you are forecasting estimated figures, consider what forms of income your business may have and when. You can anticipate cash incoming by looking at previous years, identifying seasonal trends and accounting for regular sources of income. Cash incoming can include:

• sales
• debtor receipts
• grants
• tax rebates

Total incoming

Calculate the total incoming by adding all cash incoming items.

Cash outgoing

Cash outgoing is any payments that your company makes. If you are forecasting estimated figures, consider what expenses will be required to operate your business and when they need to be paid. You can anticipate cash outgoing by looking at previous years, identifying seasonal trends and accounting for your major expenses. Cash outgoing can include:

• accountant fees
• advertising and marketing
• purchases
• rent and rates
• utilities

Total outgoing

Calculate the total outgoing by adding all cash outgoing items.

Monthly cash balance

Calculate the monthly cash balance by subtracting the total outgoing cash from the total incoming cash.

Closing balance

Calculate the closing balance by adding the opening balance and total incoming, then minus total outgoing.