Cash flow management is imperative in operating a viable business. Cash flow management can improve a company’s liquidity, reduce costs, and increase profitability. Rink & Robinson, PLLC will assist you in maintaining optimal cash levels. We do this by tracking sources and creating budgets according to your business cycle.
A cash flow statement is one of the most important financial statements for a project or business. The statement can be as simple as a one page cash flow analysis or may involve several schedules which feed information into a central statement.
A cash flow statement is a listing of the flows of cash into and out of the business or project. Think of it as your checking account at the bank. Deposits are the cash inflow and withdrawals (checks) are the cash outflows. The balance in your checking account is your net cash flow at a specific point in time.
A cash flow statement is a listing of cash flows that occurred during the past accounting period. A projection of future flows of cash is called a cash flow budget. You can think of a cash flow budget as a projection of the future deposits and withdrawals to your checking account.
Cash flow statement
Many cash flows are constructed with multiple time periods. For example, it may list monthly cash inflows and outflows over a year’s time. It not only projects the cash balance remaining at the end of the year but also the cash balance for each month.
Working Capital
Working capital is an important part of a cash flow analysis. Computing the amount of working capital gives you a quick analysis of the liquidity of the business over the future accounting period.
Some cash flow budgets are constructed so that you can monitor the accuracy of your projections. These budgets allow you may make monthly cash flow projections for the coming year and also enter actual inflows and outflows as you progress through the year. This will allow you to compare your projections to your actual cash flows. You can make adjustments to the projections for the remainder of the year.
Rink & Robinson, PLLC are very experienced in reviewing cash flow analysis. Our expertise can help find faults with your cash flow so your business can thrive.