The Cashflow Statement report is a standard financial statement. It shows how changes in Net Profit and Balance Sheet accounts affect cashflow, and cashflows are categorised by Operating, Investing and Financing activities. To run this report correctly you must first categorise accounts in these categories.
Step 1 - Nominate Accounts
Since the Cashflow Statement report allocates cashflows as either Operating, Investing or Financing and excludes Non-Cash accounts, you are required to categorise your chart of accounts accordingly.
Browse to Budgets & Cashflow -> Cashflow Settings -> Cashflow Statement
Categorise accounts by moving them between the columns provided for each category.
You can either Drag and Drop accounts or select multiple with Ctrl + Left mouse click followed by the Move selected to drop-down to move the account to another category.
Tip: 💡See Activity Types section below for a description of what to include in the Operating, Investing and Financing activities.
Note: 🗨️ Bank accounts, Current Year Earnings and Retained Earnings are all excluded from the Statement of Cashflows nominations. See the Bank & Equity cashflow setting help article to define these accounts.
Click SAVE CHANGES to save your changes when you have finished editing your account nominations.
Step 2 – Ensure Non-Cash Accounts are Balanced
All nominated Non-Cash accounts must balance to Zero. If they do not there will be a discrepancy row shown on your Cashflow Statement. By nominating an account as Non-Cash it will be excluded from Cashflow Statement and therefore if the amounts for the reported period that are excluded do not equal zero the report will not balance and a discrepancy row will appear.
Carefully review your Non-Cash activities to ensure each account has a matching account to keep the group balanced. Also be mindful that there are very few true Non-Cash accounts. For example you may be tempted to nominate accrual accounts as Non-Cash however an accrual account is more likely Operating as it is used to adjust the cashflow timing on an Operating Activity.
Tip: 💡If you find a discrepancy row on your report, run the Cashflow Statement Discrepancy Analysis report as this isolates the Non-Cash accounts and their values into a single reconcilable report.
Step 3 - Present Cashflow Statement Reports
Please see the Cashflow Statement Reports help note for instructions on how to create an account tree to help you summarise the Cashflow Statement and display the report.
Activity Types - Cashflow Statement Report
Operating Activities
Operating Activities are the principal revenue producing activities of the organisation. Since most Profit and Loss accounts are categorised as Operating Activities, it is common for this category to be calculated starting with Net Profit, then the Non-Operating Activities are adjusted out.
Non-Operating Activities include Non-Cash accounts like depreciation. There will also be adjustments for Balance Sheet movements such as Current Assets and Current Liabilities like Debtors and Creditors. This is referred to as the Indirect Method. Calxa supports both the Direct and Indirect methods. Simply choose the appropriate report template when preparing your Cashflow Statement report.
Investing Activities
Investing Activities represent the acquisition and disposal of long-term assets or other long term investments. Purchasing or selling property, plant and equipment or intangibles would be classified as Investing.
Financing Activities
Financing Activities represent transactions that result in changes in the size and contribution of capital and borrowings. Examples of Financing Activities include changes in equity related to shares, or changes in liabilities related to long term borrowings.