Cash Flow

There are two types of cash flows; cash flow statement and cash flow forecast. Both reports are similar in many ways, but have different functionalities for businesses to use.

A cash flow statement is a financial statement that illustrates to you your businesses

incoming and outgoing money during a time period. The principal reason behind why businesses produce cash flow statements is because it is an analytical tool that is useful in determining the short-term viability of a company, particularly its ability to pay bills.

A cash flow forecast on the other hand is a management statement that is needed to foresee the future, to enable your business to grow. The cash flow forecast aids you to distinguish any major adjustments made to your bank account and cash enabling you to take action if needed. The forecast will enable you to view how investment in capital items influence the cash flow and the growth of the business.