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In accountancy, a cash flow statement is an important account alongside the P&L and balance sheet. It will display the inflows and outflows and then will display either a negative or positive monthly balance appropriately. This can actually be a little similar to a personal budget, and you can set up such a statement similarly either on paper or with Excel spreadsheet.

The first step towards preparing a cash flow statement will be to outline a number of months, perhaps three for a quarterly statement, six or even twelve. These need to be in correct order from January onwards and will provide the main columns for the sheet.

Then you will need to to start including a number of rows down the sheet on the left side. This will first include a beginning balance for the month, and that will be what is carried over from the previous months ending balance. It will be the same.

Hereafter, you can start including any potential inflows under a sub title of inflows. Have a few row headings for the main potential inflows. Then at the bottom of each you will need to include a total, where the overall sum is included. You will need to have some clear lines to separate this row. Hereafter, the total opening balance will be adding the opening balance with the total sum.

The second part of a balance sheet will include all the expenses, a little like a personal budget. You can include a good number of potential rows here, for each category. At the bottom, a subtotal will need to have a clear line above it, and will include the overall total.

From here, you can now find an ending balance for the month. This will be a further row, titled ending balance which will take the outflow total off the total opening balance. This will then leave either a positive or negative ending balance. If the balance is negative, then brackets are sometimes included around the total to highlight this.

Hereafter, with all the rows and columns in place figures can be entered. A good example of a complete cash flow statement sheet is this sheet example. So, you can pretty much just copy this cash flow statement template!

Overall, the statement can actually be more like a budget for forecasting. A complete cash flow statement will identify either positive or negative balances for the months included and year.

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