Cash Flow has never been easier.
Small business entrepreneurs understand that the change to their cash balance between two periods of time can be greatly impacted by factors beyond net profit or loss in that period. Our new Cash Flow Statement in Ceterus Edge incorporates data from your Profit & Loss and Balance Sheet to help you understand how other transactions and activity impact your overall cash balance on a consistent basis.
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Why should I review the Cash Flow Statement?
Ceterus strongly recommends that you create a habit of reviewing your Cash Flow Statement with each period close to develop familiarity with how your various business activities affect your cash. It is important for small business entrepreneurs to not expect your profit and loss statement to match the change in your bank account. The Cash Flow Statement helps to understand why.
Where will I find this report in Edge?
This report is housed under Financials > Cash Flow Statement in Edge Web. This will be a new tab under the Financials section to easily review all financial data in one area. This report is currently not available to view on Edge Mobile app.
What will I find on the Cash Flow Statement?
The main components of the Cash Flow Statement are cash from operating activities, cash from investing activities, and cash from financing activities.
In the last two lines in the Cash Flow Statement, you will see the cash balance at the beginning of the period and at the end of the period. The flow of the report from top to bottom is intended to outline by activity type how your profit or loss, taken together with other activity that does not directly affect profit or loss, drove changes to your cash balance.
This section records changes in equipment, assets, or investments.
Cash changes from investing are generally considered “cash outflows” because cash is used to purchase equipment and other assets. You will see activity in these accounts if you purchased a capital asset (an asset with a useful life greater than one year and subject to depreciation).
This includes activities related to paying down or securing loans and any changes in equity (generally where an owner makes a contribution of cash or takes a cash distribution).
These are activities from normal operations of the business.
This section shows how much cash is generated from a company’s core products or services. The starting point for the report shows your operating result for the period (profit or loss) and then details by category changes in asset and liability accounts (without affecting your net income) or non-cash expenses that affect your net income but not your cash balance. For example:
- The timing of credit card payments can impact cash flow. Adding additional credit card debt will reduce net income. However, if you have not yet paid for those expenses, you will see an increase in cash as an offset
- Depreciation is an expense that affects your net income, but it is not a cash outlay
When you secure a loan, the incoming cash does not impact profit and loss, but is set up as a liability on your balance sheet. As payments are made, the principal portion reduces this liability and reduces cash flow but not profit. Only the interest portion will impact profit as an additional cost to your business.
How can I download this report for my records?
This is currently not an exportable report, however you can print this or save to your desktop by using your browser’s Print tool.