GLG Accounting | Comprehensive Cash Flow Statement Preparation

1. Cash flow statement preparation is an integral and important part of financial management. There is an alternate name for such statement as well, and that is, statement of cash flows. In fact, Cash flow statement preparation is sort of a necessary thing to keep a track of your prevailing situation related to the cash accounts. This article is intended to provide you some vital information about this subject, so let us build our knowledge together. What is it? It is something that falls under the domain of financial accounting. We can also call it one of the most important financial statements as well. This statement indicates the balance sheet accounts and the way our income is affecting cash and cash equivalents. Therefore, this kind of financial statement acts like an x-ray of our ongoing business activities. What are its benefits? There are several benefits of undergoing the process of cash statement preparation. In fact, it is like a mirror that shows us how our decisions are affecting our cash or in other cases complementing it. Throwing a quick sight on such a statement can provide an expert with a lot of insights as well. In short following are the biggest benefits of maintaining a cash flow statement:  It provides information about the inflows and outflows from and to all sources

2.    The information featured cannot be manipulated as it shows cash in and cash out The accounting methods used in this statement can be understood by non-accountants as well It keeps you informed about the day-to-day dynamics of your business in context of tax The Quality Matter There isn’t any doubt that cash flow statement preparation is a beneficial activity. However, remember that the quality of such a statement is very important. A poor quality statement full of errors can put a devastating impact on your business. Therefore, always ensure that the statement you have on your table is a perfect one, and there isn’t anything misleading in it. Understanding its structure The cash flow statement preparation involves similar steps to finalize such a statement. You may found slightly different features, however; the structure and main parts are uniforms across the globe. Let us provide you with some basic information about the three necessary parts of any such statement 1. Operating Activities This section deals with and records all the inward and outward financial activity of a company. There are two possible kinds of entries that you can find in a cash flow statement. The first one represent cash that was consumed in terms of salaries and raw materials etc. While the second one represents an inward flow of cash that the company earned with the help of its operating activities, which includes sales. 2. Investing Activities During a cash flow statement, preparation the second category that we consider is investing activities. As its name confirms this category includes the details of cash moving inward or outward just because of an investment instrument. This section also includes money invested in terms of acquisitions and similarly, earned and received cash on behalf of the acquisitions. 3. Financing Activities This is the third critical element, which we address during a cash flow statement preparation. This section includes information about the cash movement because of manipulating financial instruments like bonds. The financing activities often deals with the cash transactions been made to improve the level of liquidity. Should I Hire a Professional? In case if you don’t have a qualified accountant available to look after the cash flow statement preparation process then yes! Hiring professionals can be beneficial for your business as they come with a biased and open mind. In addition to this, their grip on the subject also makes them the ideal choice. Address:400 Central Ave, Suite 340B, Northfield, IL 60093, USA Phone:(312) 754-9377

3. Referral: https://www.glgaccounting.com/cash-flow-analysis/