Cash Flow Statement Template

A cash flow statement template is used to produce an easy to read document that outlines how revenue is generated, where it goes and what it is used for. The cash flow statement is essentially a standardized financial document used to calculate a company’s net income, compare it to the expenses that have been incurred and to determine whether the company is making a profit or losing money. A more informal and simpler statement would only display net income and the net amount of cash in and out over the period specified. Using a cash flow statement template will help streamline the report which will lessen confusion and increase productivity. There are many different styles of cash flow statements, which all are based on the same general format but some use different formulas.

There are two schools of thought on how to create the cash flow statement template. The first school of thought is to take a business statement or a manual and create a template from those details. Manuals do not always have all the details needed to create a simple and accurate statement and can contain missing fields. Creating them from scratch can be a difficult task that many businesses choose to outsource. Outsourcing is also typically very expensive.

Cash Flow Statement Template

Cash Flows template for Microsoft Excel
Cash Flows template for Microsoft Excel

The second method is to use Microsoft Excel. Microsoft excel is one of the most widely used programs on the market for creating statements and other documents. There are many different versions of Microsoft excel all designed to accomplish various tasks. Microsoft excel also has built in tools that allow for customization and it is capable of exporting files in the most popular formats such as Microsoft Excel 2021 and later. This is the most commonly used application for creating cash flows statements. It is fairly easy to learn how to use excel and the most amount of time and cost is saved when using Microsoft excel to create the statement.

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The third method is to find a free online accounting software that will allow one to create their own cash flow statement templates. Most accounting software today has the ability to export certain documents and this makes it easy to create them from accounting software. Some accounting software will even allow the user to customize the format of the document making it very easy to change it to meet individual needs. One may find that they need to make a few changes before the template takes shape but the ease of use makes it very doable.

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Cash Flow Statement Essentials

Operating Activities

Operating activities make up the day-to-day business, like selling products, purchasing inventory, paying wages, and paying operating expenses. Perhaps the most important line of the cash flow statement is the Net Cash Flow from OperationsThis section of the statement is associated with the Current Assets and Current Liabilities sections of the Balance Sheet, as well as the Revenue and Expenses section of the Income Statement.

Investing Activities

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

Financing Activities

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

I’m not going to try to explain how to prepare or analyze the cash flow statement other than to say that if you have the records of all the cash transactions, then the preparation can be done using the simple method of categorizing the receipts and payments into the three categories listed above. The indirect method can be used to create the statement of cash flows from the information in the balance sheet and income statement, but I’ll leave that explanation for the textbooks. For more information, see the references below.

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The fourth method is to purchase ready made templates off of the internet. These are generally easy to use and will provide for an accurate portrayal of what the template will look like. It is important to be cautious though because there are several sites that sell templates that are not accurate and up to date. Many companies that offer free cash flows also offer free trials that may include a small amount of information that is outdated.

Cash flow statement templates can save a company time and money in the long run. This method will allow the individual to get a quick view of their cash flows in order to get a good idea of where there cash are at all times. This saves the company a great deal of money because they will not need to keep up with updating statements on a regular basis. The template alone could save the company thousands over the course of a year or two and this is why so many people use it.

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