Free Cash Flow Statement Template

Running a small business requires keeping a pulse on your financial health. While there are several types of financial records you’ll need to monitor regularly to maintain that financial health, your cash flow statement is arguably the most important one.   

A statement of cash flows is a financial statement that tells you how much cash you have on hand for a specific period. It’s used together with the income statement and balance sheet to give you a full financial picture of your business.

Bench Accounting's free cash flow statement template is designed to simplify the way you track and understand your income and expenses. Whether you’ve been growing your business for a while or are a new entrepreneur, our template can serve as a powerful tool that enables you to keep track of every dollar coming in and out of your businesses. 

It’s exactly what you need to make more educated financial decisions that’ll encourage sustainable growth as long as you have products or services to provide to the public.
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Understanding your cash flow statement

You can think of your cash flow statement as the financial heartbeat of your business. Unlike an income statement, which demonstrates profitability, a cash flow statement reveals the actual cash moving through your business. It can provide you with a real-time snapshot of your financial liquidity, which you can reflect on to see how well you’re managing your business’s financial activity. 

If you’ve never worked with a cash flow statement before, here’s what you can expect it to include:

• Cash from operating activities
• Cash from investing activities
• Cash from financing activities
• Beginning and ending cash balances

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A completed cash flow statement will show your net cash: all your cash inflows and all your cash outflows, whether that’s a positive or negative number. (Note: “cash” can mean actual cash, or cash equivalents—liquid assets).

Let's take a closer look at what cash flow statements do for your business, and why they're so important. Then, we'll walk through how to create your own using our template.

Why you need a cash flow statement template

Creating a cash flow statement from scratch can be a bit overwhelming. Our template ensures that you don’t miss any important cash-related activities in your business, so you don’t have to worry about leaving anything out or making any mistakes. 

What’s more, having a cash flow template handy comes with the following benefits:

A. It helps keep your cash flow records consistent

Consistency is key when it comes to any kind of financial tracking. By using a standardized cash flow template, you can create a uniform method of recording your business’s cash transactions. This approach allows you to easily track your business's financial performance across different months or quarters, identifying trends and patterns that might otherwise go unnoticed. 

Consistent records mean you're always prepared, whether it's for tax season, investor meetings, or your own strategic planning.

B. It enables better financial forecasting

Historical data is often a powerful predictor of future performance in terms of cash flow forecasting. With a systematic approach to tracking your cash flow, you can analyze past financial trends to make more accurate predictions about future income, revenue, and expenses. 

This forward-looking perspective—made easy with our free template—allows you to anticipate potential financial challenges and opportunities, giving you a strategic advantage in managing your business finances.

C. It can alert you of potential cash shortages

Imagine having an early warning system for your business's financial health. A well-maintained cash flow statement does exactly that. 

By regularly monitoring your business’s incoming and outgoing cash, you can quickly identify potential financial shortages before they become critical problems. This proactive approach allows you to take corrective actions, such as securing additional funding, cutting unnecessary expenses, or adjusting your business strategy to accommodate upcoming periods where you may be spread a little thin.

D. It promotes better financial decision-making

When it comes to business financing, the more knowledge, the better. A clear, detailed cash flow statement can provide a comprehensive view of your business's financial movements, empowering you to make more informed decisions. 

From determining when to make major purchases to understanding the best times to invest in growth or cut back on expenses, your cash flow statement becomes an invaluable decision-making tool that can make or break your future.

E. It provides a professional presentation for stakeholders

First impressions matter, especially when it comes to groups of people you want to invest in your business or approve of your future growth plans. When you're seeking investors, applying for loans, or presenting to stakeholders, a clean, organized cash flow template speaks volumes about your business's financial management and credibility.

A well-prepared cash flow statement demonstrates professionalism and financial acumen, providing you with a strong opening for the people you want to hear yes from.
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How to use Bench Accounting's cash flow statement template

To get started, you’ll want to have your business's income statement and other relevant financial statements, such as your accounts receivable statement, on hand to ensure accuracy. If you don’t have income statements prepared, that’s okay. You’ll still be able to use this cash flow template if you have up-to-date bookkeeping. Otherwise, you can do your own bookkeeping to create an income statement using our free income statement template.

When you have your financials ready, follow these steps:

Step 1: Enter your name and email above to download our free Excel cash flow statement template

Step 2: Open the template to get a full view of the financial categories. You'll see sections such as cash from operating activities, cash from investing activities, cash from financing activities, additions to cash, subtractions to cash, and more.

Step 3: Delete the sample data and enter your key financial numbers in the appropriate categories, including cash inflows and outflows for each business activity.

Step 4: Review your final cash balance and use that number to assess the financial health of your business.

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Essential tips for creating and balancing your cash flow statements

Understanding your cash flow statement to make better financial decisions can take a little practice. The most important thing to remember is that you want to ensure all the information you include is accurate and current.

Be sure to follow these tips to ensure accuracy each and every time: 

• Always separate personal and business finances to ensure clean, accurate reporting
• Record transactions as they occur, not when you remember them. (This may require keeping a spreadsheet or notebook handy to mark the dates, times, and descriptions of your cash activities)
• Always include all sources of cash, including sales, loans, and investments
• Don't forget to account for seasonal fluctuations in your business
• Reconcile your cash flow statement with bank statements monthly to maintain the proper balance
• Remember that cash flow is different from profit—cash flow shows you how much money moves in and out of your business while profit shows you what is left after paying expenses
• Keep detailed documentation for every transaction. (Again, this may require an ongoing spreadsheet or notes!)

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If you do your own bookkeeping in Excel, you can create cash flow statements each month based on the information on your income statements and balance sheets. If you use accounting software, it can create cash flow statements based on the information you’ve already entered in the general ledger.

Keep in mind, with both those methods, your cash flow statement is only accurate so long as the rest of your bookkeeping is accurate too. The most surefire way to know how much working capital you have is to hire a bookkeeper. They’ll make sure everything adds up, so your cash flow statement always gives you an accurate picture of your company’s financial health.

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How Bench can help with building your cash flow statement

Bench Accounting provides U.S. small businesses with professional bookkeeping services and powerful software to view visual financial reports. With Bench, you can keep tabs on your small business financials with just a few clicks. Sign up today and receive a free month of bookkeeping with financial statements to keep.

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Additional resources for reviewing your small business finances

• How to Effectively Manage Your Cash Flow
• 7 Questions to Determine Your Company's Financial Health
• The Difference Between Bookkeeping and Accounting‍
• Financial Literacy 101‍‍
• How to Read and Understand Financial Statements [VIDEO]‍
• Understanding Financial Statements [E-COURSE]

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