How to Generate Cash Flow Reports

Cash Flow reports track the movement of cash into and out of your business across three distinct categories: operating activities (core business operations), investing activities (capital expenditures and asset sales) and financing activities (loans, equity and distributions). Unlike profit-based reports that use accrual accounting, cash flow statements focus exclusively on actual cash transactions, providing critical insights into liquidity, solvency and the organisation's ability to meet short-term obligations.

Exacc generates cash flow statements using either the direct method (listing actual cash receipts and payments) or the indirect method (reconciling net profit to net cash flow by adjusting for non-cash items and working capital changes). The indirect method is more commonly used as it directly links the cash flow statement to the Profit & Loss statement, helping stakeholders understand why profit figures differ from cash generated or consumed during the period.

Regular cash flow analysis enables business owners to identify cash shortfalls before they become critical, optimise working capital management by understanding the timing of receivables and payables, and make informed decisions about capital investments, debt repayment schedules and distribution policies. Positive operating cash flow indicates that the business generates sufficient cash from its core activities to sustain operations without relying on external financing or asset sales.

Ready to analyse your cash movements? Follow the steps below to generate cash flow statements, review operating, investing and financing activities and understand how cash flows through your business to inform strategic planning and liquidity management decisions.