Cash Flow Statements

A budget tells money where to go, rather than wondering where it went. It would also be nice to know where it came from. That is the purpose of a cash flow statement. It tells you whether your income is from good trading, or just good coincidence. Is it real profit, or just interest from the bank balance? Are there any serious spending concerns that need to be addressed?

Whether you look forward, or backward, or a combination of both, cash flow statements supply the information you need to run your business smoothly.