Manage Your Companies Cash Flow in QuickBooks
Every business wants to know its cash position. Where they have spent, from whom they have to receive cash and the available cash with them. This can be known by knowing the cash flow statement QuickBooks of the business. This article will give insights about what is cash flow? How to manage QuickBooks cash flow Statement?
What is the cash flow?
Cash flow is a movement of cash in and out in the business. Cash inflows are sources of income that come to the business. Cash outflows are the expenses incurred by the business. It is categorized into three types of activities: operating, investing and financing.
A cash flow statement is thus a statement which shows the in and out of cash in the business. It keeps a track of the cash in the business. It also provides with insights about the company’s liquidity.
Managing cash flow in QuickBooks
Cash flow is crucial for every business, whether small or big. Consistent cash flow is needed for the survival of the business.
- Manage cash flow – QuickBooks allows its users to know how much cash they have in hand. It tracks and organizes the company’s data. Then it prepares the cash flow statement of the business. The activities undertaken by the businesses in order to control the delay between the time taken to make payments and collect cash is known as cash flow management. Businesses tend to delay their payments while encouraging those who owe them to pay as quickly as possible.
- Make better decisions – Cash flow statement helps in better decision making as it gives insights about cash inflow and outflow. Knowing the position of cash in the business is essential for the success of the business. Quickbooks generates and gives a clear picture of the cash flow over a specific period of time.
- Insights about financial health – Cash flow statement is one of the three crucial statements needed by any business. The other two being balance sheet and income statement. QuickBooks gives easy access to generate and view these statements. Cash flow statements help in predicting the future need for cash in the business.
Also Read: Why switch to QuickBooks from other accounting solution? [xyz-ihs snippet=”chat-button”]
How to run a cash flow statement in QuickBooks?
It is easy to access the cash flow statement in QuickBooks. Before running the report in QuickBooks, one must do the following tasks:
- Updating QuickBooks with all income and expenses.
- Ensure that all assets and liabilities are recorded.
- Reconcile bank statement.
After the QuickBooks is updated, QuickBooks is ready to run the cash flow statement. Here are the steps to run the report:
- From the left menu, select report.
- Then choose All Reports.
- Now click on Business Overview.
- Select the Cash Flow Statement.
- To customize the dates, the format of the report click on the Customize button on the right-hand side of the screen.
With QuickBooks, one can even forecast the cash flow with the help of QuickBooks cash flow projector. It allows users to perform scenario analysis and view projection without altering the data of the QuickBooks ledger. The steps of the same are as follows
- In the Company menu, go to Planning & Budgeting.
- Click on Cash Flow Projection.
- Choose the bank account for projection.
- Predict the cash receipts for the next six weeks.
- Estimate the business expenses.
- Run the report and view the cash flow for the next six weeks.
Hope this would have helped in understanding cash flow and how to manage it in QuickBooks. If the users face any difficulty in running the cash flow statement they can get in touch with the QuickBooks online help desk number 1-855-857-0824.