Contents:
What does a cash flow statement show?
A cash flow statement shows how much money a company received and paid during a selected period. In a management report, receipts and payments are grouped by category and type of activity so you can see why the cash balance changed.
An internal management cash flow statement and a statutory financial statement serve different purposes. This article focuses on management reporting for a construction company. If you prepare statutory accounts, follow the requirements of your jurisdiction and accounting policies; an internal spreadsheet does not replace them.
For a report in one currency with no exchange-rate remeasurement, opening cash plus receipts minus payments equals closing cash. For example, an opening balance of RUB 500,000, receipts of RUB 900,000 and payments of RUB 750,000 give a closing balance of RUB 650,000. If the company holds cash in foreign currencies, account separately for the effect of exchange-rate changes when reconciling balances. When combining company accounts, treat transfers between your own accounts as internal movements so you do not double-count cash flows.
Why does a construction company need a cash flow statement?
Construction firms often receive customer advances and pay suppliers, crews and subcontractors on different dates. A cash flow statement helps you examine actual flows by project and across the company. To anticipate a cash flow gap, supplement the historical report with a payment calendar showing expected receipt and payment dates.
See where cash is going
Group payments for materials, labor, logistics, rent and other categories. Comparing periods may reveal rising spending; check the volume of work and contract terms before deciding what to cut.
Assess the effect of late customer payments
Compare the payment date agreed in the contract with the actual receipt date and upcoming obligations. This shows which payments a delay could affect. The cash flow statement records transactions that happened; a forecast covers future payments.
Distinguish profit from cash on hand
Profit and cash flow can differ: a company may recognize revenue and costs for work performed while receiving or paying the cash at another time. A cash flow statement explains changes in cash; use an income and expense report to analyze changes in profit. See our guide to financial accounting for income and expenses for more on this distinction.
What are the sections of a cash flow statement?
Cash flows are commonly grouped into operating, investing and financing activities. For an internal report, define your categories and classification rules and apply them consistently. The examples below are for a typical construction company; classify a particular transaction according to its economic substance.
| Activity | Cash receipts | Cash payments |
|---|---|---|
| Operating | Customer payments for work and advances under contracts | Materials for jobs, payments to crews and subcontractors, logistics, rent and current taxes |
| Investing | Sale of long-term equipment owned by the company | Purchase of equipment or another long-term asset for the company |
| Financing | Loan proceeds | Repayment of loan principal |
Do not put customer payments for services under expenses: they are operating cash receipts. Likewise, do not confuse materials bought for a project with long-term equipment purchased for the company. Show loan interest separately and classify it under the applicable policy; repayment of principal is a financing cash flow.
For each section, show receipts, payments and net cash flow—the difference between receipts and payments. In a single-currency report without exchange-rate remeasurement, the combined net flow from the three sections equals the change in cash over the period. If several currencies are involved, reconcile the effect of exchange-rate movements separately.
How do you prepare and check the report?
- Choose the period and scope: one project or the entire company. For a company-wide report, include all relevant accounts, cash on hand and projects.
- Reconcile actual receipts and payments with bank statements and cash records. Each transaction should have a date, amount, purpose and associated project where applicable.
- Separate internal transfers from external flows and assign transactions to the three sections and their categories. Check advances, refunds and loan payments separately.
- Calculate opening and closing balances, net flow by section and the overall total. If the balances do not reconcile, look for missing or duplicate transactions.
- Compare actual cash flow with the payment plan. If a shortage is expected, review the timing of receipts and payments and the financing available.
Which cash flow data can you get from 101?
In 101, you can record project receipts and advances (guide in Russian) and export a document showing money movements for a selected period. In the web version, open the project's documents, select the balance report for cash movements, choose the period and PDF or Excel format, then create the document. For a PDF, check the preview and save the file. The steps are described in the 101 project-report guide (in Russian); document labels may vary with interface language.
A project document helps you review receipts and expenses for that job. It reflects the data entered in 101 and does not by itself establish that all company payments have been recorded. To prepare a company-wide management cash flow statement, combine the relevant projects and non-project transactions, then reconcile the result with bank accounts and cash on hand. For a breakdown of costs, select the expense statement by category for the same period in the web version.
