Quickbooks offers a variety of financial reports. When using Intuit’s popular accounting software, for example, you may come across a statement of cash flows. It’s an optional report that provides insight into a business’s cash flow. If you own a business, you should consider running a statement of cash flows.
An Introduction to Statement of Cash Flows
A statement of cash flows is a report generated in Quickbooks that lives up to its namesake by offering an overview of your business’s cash flow. Cash flow, of course, is a measure of liquidity. It reveals the amount of money going into your business versus the amount of money going out of your business.
You can run a statement of cash flows for any given period. Maybe you want to identify your business’s cash flow for the prior month, or perhaps you want to identify your business’s cash flow for a particular fiscal period. With a statement of cash flows, you can find your business’s cash flow for any given period. It’s simply a report that shows revenues and expenses for a given period.
Why is cash flow important exactly? For starters, it reflects your business’s ability to satisfy short-term debt. If your business has poor cash flow, it may struggle to make payments on loans and operational expenses. Strong and positive cash flow, on the other hand, means your business has a high amount of revenue relative to its expenses. Therefore, your business should be able to easily to cover its short-term debt.
How to Run a Statement of Cash Flows
You can run a statement of cash flows by logging in to your Quickbooks account and selecting the “Reports” menu. Quickbooks will then display a list of all available reports from which you can choose. Since there dozens of reports available, you should filter them by entering “Statement of Cash Flows” in the search field. This should remove all other reports, thereby allowing you to select the option for a statement of cash flows.
While optional, you may want to customize your statement of cash flows before running it. You can customize specific parts of a statement of cash flows by clicking the “Customize” button. When customizing a statement of cash flows, you can select a different date range and other options.
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