> ## Documentation Index
> Fetch the complete documentation index at: https://docs.hitaji360.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Cash Flow

> The Cash Flow statement explains how the cash balance moved over a period — why profit on paper didn't (or did) turn into money in the bank.

The Cash Flow statement explains how the cash balance moved over a period — why profit on paper didn't (or did) turn into money in the bank. It uses the **indirect method**: it starts from net income and adjusts for non-cash items and changes in working capital, then groups the result into operating, investing, and financing activities.

You'll find this at: `/accounting/reports/cash-flow`

> 📷 *Screenshot: Cash Flow with the Operating, Investing, and Financing cards and the reconciliation strip — to be added.*

## When to use it

* To understand the gap between reported profit and the actual change in cash.
* To see where cash came from and went — day-to-day operations, buying/selling assets, or financing.
* At period-end, to demonstrate that the books reconcile: the statement proves that the three sections add up to the real movement in the cash and bank balances.

## How to run it

The Cash Flow covers activity *over a period*.

* **Period (From / To)** — set the start and end dates. It defaults to the current month.
* **Comparative** — attach a **Prior period** or **Prior year** column to compare the sections against an earlier window.

The report refreshes automatically; a **Refresh** button re-pulls the latest figures.

## Reading the report

The statement is presented as three cards, each showing its lines and a section total.

| Section       | What it captures                                                                                                                                                                                                                                       |
| ------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| **Operating** | Cash from running the business. Starts with **Net Income**, then adds back non-cash charges (such as depreciation) and the period's changes in working capital — receivables, payables, inventory, tax payable, customer deposits, and staff advances. |
| **Investing** | Cash tied up in or released from longer-term assets (buying or disposing of fixed and other non-current assets, excluding depreciation).                                                                                                               |
| **Financing** | Cash from owners and lenders — changes in long-term liabilities and equity (capital contributions, loan draw-downs and repayments), excluding the part of retained earnings that's just this period's net income.                                      |

Each line shows the account, an optional tag (for example **working-capital** or **depreciation**), and its **cash impact** — a positive figure is cash coming in, a negative figure is cash going out. With a comparative selected, each section header also shows the prior period's total.

### The reconciliation

Below the three cards, a summary strip closes the loop:

* **Net change in cash** — Operating + Investing + Financing.
* **Opening cash → Closing cash** — the cash and bank balances at the start and end of the period.
* **Reconciliation** — a green **Reconciles to BS cash** badge when the net change equals (closing cash − opening cash). If they don't match, a red **Variance** badge shows the gap.

A variance means the net change the statement computed doesn't agree with the actual movement in the cash accounts — almost always a sign of an unbalanced journal somewhere in the period. Check the [Trial Balance](/accounting/user/reports/trial-balance) (its Difference should be zero) before relying on the statement.

> 📷 *Screenshot: The reconciliation strip showing "Reconciles to BS cash" — to be added.*

## Why net income is only the starting point

Profit is measured on an accrual basis — a sale is income the moment you invoice it, even if the customer hasn't paid. Cash flow strips that back out: if receivables grew during the period, that's profit you haven't collected yet, so it reduces operating cash; if payables grew, that's expense you haven't paid, so it adds to operating cash. Depreciation is an expense that never moved cash, so it's added back. The operating section is net income put back onto a cash basis.

## Exporting

**Export** offers CSV, Excel (.xlsx), and PDF. The export lists each line under **Operating**, **Investing**, and **Financing** with its account and cash impact, followed by the section totals, **Net change in cash**, **Opening cash**, **Closing cash**, and the **Reconciliation delta**. The PDF carries your business name and the period in the header.

## Tips and gotchas

* **Variance on the reconciliation** points to an out-of-balance ledger, not a problem with the statement — fix it at the source.
* The statement reflects **posted** activity within the period.
* The opening and closing cash figures tie to the cash and bank accounts on the [Balance Sheet](/accounting/user/reports/balance-sheet) at the period's start and end.
* For a closed/locked period, the figures come from the frozen snapshot taken at close.

## Related

* [Reports overview](/accounting/user/reports/overview)
* [Profit & Loss](/accounting/user/reports/profit-and-loss) — the net income this statement starts from
* [Balance Sheet](/accounting/user/reports/balance-sheet) — the cash balances it reconciles to
* [Trial Balance](/accounting/user/reports/trial-balance) — check here if the reconciliation shows a variance