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A cash flow statement is a financial document that tracks how much cash is coming into and out of your business over time. An overview of your total incoming and outgoing cash will give you the clearest picture of your company\u2019s liquidity by detailing cash inflows and outflows from operating, investing and financing activities<\/a>.<\/p>\n Unlike an income statement, which includes non-cash transactions, a cash flow statement is just about actual cash flow. With this knowledge, you can better assess your ability to cover expenses and strategise for the future.<\/p>\n A cash flow statement is the best way to understand your business\u2019s cash position. It can help business owners make informed decisions about their operations and investments.<\/p>\n The statement highlights whether a company has positive cash flow (more cash coming in than going out) or negative cash flow (spending more than earning). It can also help you predict future cash flow to determine whether your business can meet its obligations, such as interest payments, payroll, supplier costs, etc.<\/p>\n <\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/www.reckon.com\/au\/wp-content\/uploads\/2026\/01\/Cash-flow-activities-1.png” alt=”3 cash flow activities are operating, investing, and financing” title_text=”Cash Flow Activities” align=”center” _builder_version=”4.27.5″ _module_preset=”default” custom_margin=”|-30px|||false|false” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″][\/et_pb_image][et_pb_text _builder_version=”4.26.1″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n <\/p>\n A cash flow statement tracks cash movements<\/a> under three main categories:<\/p>\n Start with the opening cash balance at the start of a specific period, then add the total incoming cash generated from your operating, investing and financing activities.<\/p>\n Next, you\u2019ll need to subtract the total cash paid for expenses and debt repayments and adjust for non-cash items to calculate the net cash flow.<\/p>\n The final figure represents your closing cash balance, clearly showing how much cash your business has on hand.<\/p>\n Still not convinced that creating a cash flow statement<\/a> is worth the time and effort? A well-put-together cash flow statement can help your business:<\/p>\n Bottom line? As a business owner, understanding your operating cash flow is the best way to stay on top of your commercial finances. If you can\u2019t manage it yourself, get your bookkeeper or accountant<\/a> to regularly put together a statement of cash flows (which includes cash equivalents) so you can make the most informed decisions about your next steps.<\/p>\n <\/p>\n [\/et_pb_text][et_pb_text admin_label=”Related terms” _builder_version=”4.27.4″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” locked=”off” global_colors_info=”{}”]<\/p>\n See related terms<\/strong> <\/p>\n [\/et_pb_text][ba_social_share icon_bg=”#03002e” icon_padding=”10px|12px|10px|12px|true|true” layout=”classic” show_text=”off” btn_padding=”0px|0px|0px|0px|false|false” btn_bg_color=”RGBA(255,255,255,0)” _builder_version=”4.23″ _module_preset=”default” custom_margin=”50px||||false|false” custom_padding=”25px||||false|false” custom_css_before=” content: %22SHARE THIS%22;|| font-size: 16px;|| font-weight: 700;|| line-height: 22px;|| letter-spacing: 0em;|| text-align: center;|| color: #ff5447;|| margin-bottom: 10px;|| display: inline-flex;|| position: absolute;|| margin-top: 10px;” border_width_top_main=”1px” border_color_top_main=”#e4e4e4″ border_radii_icon=”on|5px|5px|5px|5px” global_colors_info=”{}” custom_css_before_last_edited=”off|desktop”][ba_social_share_child _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”facebook” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”linkedin” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”email” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][\/ba_social_share][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" A cash flow statement is a financial document that tracks how much cash is coming into and out of your business over time. An overview of your total incoming and outgoing cash will give you the clearest picture of your company\u2019s liquidity by detailing cash inflows and outflows from operating, investing and financing activities. Unlike […]<\/p>\n","protected":false},"author":35,"featured_media":0,"menu_order":0,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"class_list":["post-288858","glo","type-glo","status-publish","format-standard","hentry"],"yoast_head":"\nWhy is having a statement of cash flows so important?<\/h2>\n
What\u2019s included in cash flow statements?<\/h2>\n
Operating activities<\/em><\/h3>\n
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Investing activities<\/em><\/h3>\n
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Financing activities<\/em><\/h3>\n
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How to calculate cash flow<\/h2>\n
How a cash flow statement compares to other financial statements<\/h2>\n
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Using a cash flow statement to supercharge your business performance<\/h2>\n
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What is gross profit?<\/a>
What is net profit?<\/a>
Gross profit vs. net profit (comparison)<\/a><\/p>\n