GLG Accounting | Comprehensive Cash Flow Statement Preparation

1. You can initiate your Cash Flow Statement Preparation process, at any time of the year. However, in some cases and with some businesses it becomes necessary to maintain and submit this report along with your tax returns. There are many business owners, who take as a burden. While, on the other hand, we have a group of keen business operators, who like to keep themselves with this kind of reports throughout the year. Let us tell you some important facts about this kind of financial report, and we believe you are going to change your mind and attitude toward it! Why we believe it to be an analytical instrument? Cash Flow Statement Preparation involves a vigorous kind of data collection from each fold of your financial activities. There are three basic sections, this report deals with,  Operational Activities  Investment Activities  Financial Activities In most cases, the whole of the financial activities of a business revolves around these three elements. That is the point that makes this report and other financial reports so important to have a better understanding of your business. After your cash flows and retained cash is one of the most critical parameters. Now after knowing the basics let us move on to some additional benefits.

2. - It happens in two cases if your business is going very good. Also, the second case is opposite to the first one, in case if your business needs an overhaul, and you are generating less by consuming more. Whatever is the cash, Cash Flow Statement Preparation helps you in sensing an upcoming cash boom, early before time. In case if your business is doing well, but your cash account is still depleting than you need to optimize your distribution and sales procedures. As an example, you can consider a more frequent invoicing against your products or services. - You`re taking money out “quickly.” A cash flow statement can indicate that the respective business owners are taking money out rapidly. You cannot found this kind of information in another kind of reports. To prevent before-mentioned quick draining of money, it is necessary to keep your distributions synchronized with your income that you are generating from operating activities. In more simple terms, you can take a bucket with a tap installed at its bottom as an example. If the inflow of water into that bucket is less than the water that is going out then, its level will decrease. So for a cash retention it's necessary to maintain an equilibrium between inflows and outflows. - The impact of Loan(s) As we have discussed above, Cash Flow Statement Preparation includes the data from financing activities too. The loan is a common kind of financing instrument as many of the newly established businesses use it. Through a statement for cash flow, you can see the impact of your loan payments on your current account. Here it is important to mention that, an income statement only represent them, “interest payments”. However, a cash flow statement contains data about both, the interest payments, and principal payments. - The impact of Investments / Financing A cash flows statement indicates a direction relationship between the investment and financing with the liabilities and assets. Hence, even an ordinary report reader can figure out, the reasons behind and increase or decrease of either one of the liabilities and assets. This report also includes information on the acquisitions and mergers. Why should I consider a Professional's help? The word, professional that you have used in your question is an enough answer itself. After all its, about a critical kind of work we are talking about. We have shown you, how important it is to know the behavior of your Cash accounts. Therefore, considering a professional firm for Cash Flow Statement Preparation is always a wise thing to do Probability of running out of money Address:400 Central Ave, Suite 340B, Northfield, IL 60093, USA Phone:(312) 754-9377 Referral: https://www.glgaccounting.com/cash-flow-analysis/