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How to Prepare a Cash Flow Statement ： A Guide for Small Business Owners

A cash flow statement is an important tool for managing a business's cash flow and planning for the future. Especially for small and medium-sized businesses, preparing a cash flow statement is essential to understand the day-to-day status of operating funds and to prepare for unforeseen events. This article will detail the basic methods of preparing a cash flow statement and its importance.

What is a Cash Flow Statement
A cash flow statement is a tool for visualizing a company's financial position by forecasting cash inflows and outflows over a specific period. This enables effective cash management by identifying in advance when cash will be insufficient and when there is room to spare.


Steps to Create a Cash Flow Chart

Set the Period
When creating a cash flow chart, define the period you wish to manage, such as weekly, monthly, or quarterly. If you are creating a cash flow statement for the first time, it is recommended that you start by creating it in monthly units.

Forecast Cash Inflows
List cash inflows from （ major revenue sources ） such as product sales, services rendered, royalty income, etc. It is important to forecast based on past performance and order information.

↓ To be continued ！
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