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Create and Understand Cash Flow Forecast and Statement of Cash Flows reports

The article helps you create and understand Cash Flow Forecast report and Statement of Cash Flows report in QuickBooks.

The Cash Flow Forecast Report

Forecasting allows you to make predictions about future revenue and cash flow, as well as assess 'what if' scenarios to help you make better decisions for your business. A forecast can be created from scratch or from actual data from the previous fiscal year. A forecast is uniquely identified by its fiscal year, and if desired, further identified by Customer:Job or Class.

The Cash Flow Forecast report helps you forecast how much cash you'll have by projecting your cash inflows, cash disbursements, and bank account balances on a week by week basis.

To create the report, go to the Reports menu, select Company & Financial then click Cash Flow Forecast.

The following are displayed on the report. To see a list of transactions that make up an amount, double click the amount.

  1. Forecasting periods - By default, the report forecasts cash flow on a week by week basis. To change the period to days, months, or another preset interval, click the Periods drop-down list and choose the interval.
  2. Delay receipts - By default, the accounts receivable forecast assumes that all customers will pay their open balances on time. To see how your cash inflows from accounts receivable will be affected if your customers are late with their payments, enter the number of days by which payments will be delayed in the Delay Receipts field.
  3. Beginning / Ending balance amounts
    1. Accounts Receivable - Shows the customer payments you expect to receive, based on the payment terms you recorded for each customer. The beginning balance is the amount of past due customer payments as of the day before the report start date.
    2. Accounts Payable - Shows the bills you expect to pay, based on the payment terms you recorded for each vendor. The beginning balance is the amount of past due bills as of the day before the report start date.
    3. Bank Accounts - Shows the expected changes to your bank account balances based on payments and deposits postdated after the report start date. The beginning balance is the sum of the balances in all your bank accounts as of the day before the report start date.
    4. Net Inflows - Shows your projected net cash inflow for each week. QuickBooks calculates net inflow from the amounts in the Accounts Receivable, Accounts Payable, and Bank Accounts columns.
    5. Projected Balance - Shows the balance of all bank accounts if all unpaid invoices and bills were paid on time.

Important:
Forecasting reports will not pull data from memorized transactions, only from transactions that have already been entered into QuickBooks.
The Statement of Cash Flows report

The Statement of Cash Flows report is a major financial statement used to track the flow of working capital into and out of a business during an accounting period.

  • It is also known as the the Statement of Changes in Financial Position and as the Sources and Uses statement, meaning the Sources and Uses of cash.
  • It is designed according to Generally Accepted Accounting Principles (GAAP).
  • It is one of four basic financial statements accepted by the Financial Accounting Standards Board (FASB) with the (1) Balance Sheet, (2)Profit & Loss and (3)Statement of Changes in Retained Earnings.
  • It displays the change of a company's financial position over a period of time, calculated from the starting cash, adding changes from non-cash accounts, resulting in the ending cash.
 

To run the report, go to the Reports menu, select Company & Financial then click Statement of Cash Flows.


Important:
You cannot filter the Cash Flow report by Class. If you are tracking different business units (BU) by class and you need a Statement of Cash Flows for each BU, you might consider using a separate data file for each business unit.

Five areas are calculated depending on how you have set up your company.

  1. Net income - The calculation is the same as an Accrual-based Profit and Loss report.
  2. Activity for each balance sheet account during the period - This does not include bank and undeposited funds accounts. This is done by adding each debit and credit for the account during the period. Balances are not carried forward from previous periods. This is identical to a Transaction Detail by Account report in QuickBooks, unless income and expense accounts have been assigned to the report. If income or expense accounts are assigned to the Statement of Cash Flows report, balance sheet activity will be adjusted accordingly.
  3. Net cash increase for period - This is done by adding net income and activity for each balance sheet account during the period.
  4. Cash at the beginning of the period - This is calculated by adding all the money the business possesses for all time prior to report period date, including bank account balances and any un-deposited funds.
  5. Cash at the end of the period - Calculated by adding cash at the beginning of the period to net cash increase.

 

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