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What is in a Cash Flow Statement?

Published June 09, 2020

Question: Your recent article included a link to a cash flow management system. Can you explain in simple terms how to use the form?

Answer: The template you are referring to can be found at and includes a tutorial for how to use the form. It is a budgeting tool that tracks cash received and cash paid out on a month to month basis.

Cash received might include income from sales, loan proceeds or interest income. If you’ve already made some sales or received some orders, you can estimate when you will actually get paid.

Cash paid out includes inventory and other expenditures like payroll, rent, utilities, taxes, loan payments, insurance, advertising and more. The cash flow statement template also includes a “pre-startup” column for cash on hand before the beginning of the cash flow statement period.

If you have been in business for a year or more you can, with reasonable accuracy, estimate your income and monthly expenses on a month to month basis. Each month you should replace your estimates with the actual income received and expenses paid out.  Subtract cash paid out from cash received, and you have your cash position for the end of the month.

For a new business owner, every dollar of startup capital is precious. Cash flow problems are a common cause of small business failure. Regularly reviewing your cash flow statement can help you avoid this fate. In fact, as a startup, you should know how much cash is in your business bank account at the end of each day.

It’s possible to have lots of revenue expected and still not be able to pay your bills. This can happen if you have more money going out than collected, if your customers don’t pay you in a timely manner. Use your cash flow projection to anticipate your working capital needs and plan ahead for upcoming expenses so you don’t run out of money.

Keep your cash flow forecast extending 12 months out at all times. Update your cash flow forecast weekly with actual figures. As your business gets underway, you will get better at forecasting cash flow with greater accuracy.

If you still need help with your cash flow statement? Connect with a SCORE mentor online or in your community to get free, personalized advice.


Gray Poehler is a volunteer with SCORE Naples. Business counseling on this and other business matters is available, without charge, from the Naples Chapter of SCORE. Call (239) 430-0081 or visit SCORE business office is located at 900 Goodlette Road North, in the Fifth Third branch bank building. Office hours are 9 a.m. to noon, Monday through Friday.

1165 Herndon Parkway, Suite 100
Naples, FL 34102
(239) 430-0081

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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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