Businesses and entrepreneurs who are hoping for professional success must have a firm understanding of their finances. From profits and losses to business expenses and sources of revenue, and more, accounting for a business is no minor–nor insignificant–task.
In order to track various business income sources, expenses and myriad other financial data, a cash flow statement is often used. At Busch CPA, our experienced Certified Public Accountants can provide your Illinois-based business with the guidance it needs in managing its finances, including the creation and management of a cash flow statement.
What Is a Cash Flow Statement?
A cash flow statement is a financial statement that records the amounts of cash and cash equivalents that enter and leave a business, as defined by Investopedia. While cash flow statements were usually kept via paper and pencil, today, most cash flow statements are managed via digital spreadsheets.
What’s the Purpose of a Cash Flow Statement?
The amount of cash that an Illinois business has is an important metric; indeed, it is with cash that bills are paid and investments in new opportunities are made. When you have a developed understanding of your cash flow, thanks to recorded data in a cash flow statement, you can answer questions like:
- Will my business be able to afford this future opportunity?
- Do I have enough cash to pay for my upcoming expenses?
- From where am I receiving money, and where am I spending it?
In short, a cash flow statement helps you to make informed, smart decisions about your business and its operations that are based on actual data, not guesses about how much money you’ll have coming in or how much you’ll be able to afford.
Keep in mind that if you are applying for a business loan or attempting to attract investors in the future, having a cash flow statement will be absolutely essential; no one will offer a loan or choose to invest in your business without thoroughly reviewing your business’ income and expenses.
Get Started Today
The sooner that you start creating a cash flow statement for your business, the sooner you can answer questions about your business’s operations and opportunities. You can also start making smart business decisions, including identifying excessive costs and eliminating wasteful expenditures.
At Busch CPA, we provide full-service accounting services to businesses and entrepreneurs throughout Chicago and surrounding areas of Illinois. From basic tax management services to detailed recordkeeping and financial statement management, we are available to serve you. To learn more about our services and how we can help your business start understanding and managing its cash flow today, please contact us.