Cash Flow

What this does

Reports → Cash Flow explains the change in cash between two dates. Net income and cash aren't the same thing: a month with strong sales but slow-paying fleet customers can lose cash; a month you bought a lift can show a loss on the P&L and a bigger drop in cash. This report reconciles the two.

Before you start

reports.view. Bank and card accounts reconciled through the end date.

Steps

Pick a preset (This Month, Last Month, This Quarter, Last Quarter, This Year, Last Year) or set Start Date and End Date, then Run Report. Three sections, each totaled: Operating Activities (customers paying, vendors and payroll paid, tax paid), Investing Activities (equipment bought or sold), Financing Activities (loans taken or repaid, owner contributions and draws). Net Change in Cash, Beginning Cash Balance, and Ending Cash Balance at the bottom.

How it's built

Cash is every bank and savings account plus Undeposited Funds (a customer's check in the drawer is cash you've been paid). The report takes every posted entry that touched a cash account in the period and classifies it by the other side of the entry: revenue, expense, receivables, and payables are operating; fixed assets are investing; loans and equity are financing. It's the direct method, built from actual entries, not derived from net income.

Common problems

Ending cash doesn't equal the bank. Same causes as the balance sheet: unposted deposits, unreconciled accounts, a transfer recorded once.

A card payment shows as an operating outflow. Paying a credit card balance moves cash to a liability and shows here; the underlying purchases showed as operating when they were charged if you count them then. Read it with the card balance on the balance sheet.

A big investing outflow I don't recognize. A check categorized to a fixed-asset account. If it was really a repair, not an asset, recategorize it from the register.