A budgeted cash flow statement is a financial statement that shows how a business’s cash is expected to flow over a period of time, usually a month or a year. It is used to help businesses plan for the future and make sure they have enough cash to cover their expenses. A budgeted cash flow statement can also be used to identify areas where a business can save money or increase revenue.
There are many different ways to create a budgeted cash flow statement, but the most common method is to use a template. A budgeted cash flow statement template is a pre-formatted spreadsheet that includes all of the necessary fields and calculations. This makes it easy to create a budgeted cash flow statement, even if you don’t have any accounting experience.
What should be included in a budgeted cash flow statement?
A budgeted cash flow statement should include the following information:
- Opening cash balance
- Cash inflows
- Cash outflows
- Closing cash balance
Cash inflows are all of the sources of cash that a business expects to receive during the period covered by the statement. This can include sales revenue, interest income, and dividends. Cash outflows are all of the ways that a business expects to spend cash during the period covered by the statement. This can include expenses such as salaries, rent, and utilities.
How to use a budgeted cash flow statement
A budgeted cash flow statement can be used to help businesses plan for the future and make sure they have enough cash to cover their expenses. It can also be used to identify areas where a business can save money or increase revenue. To use a budgeted cash flow statement, simply follow these steps:
- List your opening cash balance.
- List all of your expected cash inflows.
- List all of your expected cash outflows.
- Calculate your closing cash balance.
Once you have completed these steps, you will have a clear picture of your business’s expected cash flow for the period covered by the statement. This information can then be used to make sound financial decisions.
Conclusion
A budgeted cash flow statement is a valuable tool for any business. It can help businesses plan for the future, make sure they have enough cash to cover their expenses, and identify areas where they can save money or increase revenue. If you are not already using a budgeted cash flow statement, I encourage you to start today. It is a simple and effective way to improve your business’s financial health.
