NFP Statement of Cash Flow Report

The Statement of Cash Flow is a tool for non-profits to manage their financial resources effectively, ensure program continuity, and build trust with donors and grantors.

Benefits of this report:

  • Focus on cash, not profit: Unlike for-profit companies that focus on maximizing profits, non-profits prioritize their mission and social impact. The statement of cash flow helps them understand the movement of actual cash in and out of the organization, which is critical for day-to-day operations and fulfilling their mission.

  • Funding fluctuations: Non-profit income often comes from various sources such as grants, donations, and fundraising events. These can be sporadic and unpredictable. The cash flow statement helps track these inflows and ensures the organization has enough cash on hand to cover ongoing expenses like staff salaries, rent, and program costs.

  • Financial sustainability: A healthy cash flow allows the non-profit to operate smoothly and avoid financial strain. The statement helps them identify potential shortfalls and make informed decisions about resource allocation, budgeting, and potentially scaling back programs if necessary.

  • Improve donor confidence: Potential donors often look at a non-profit's financial statements to assess their efficiency and ability to manage resources. A strong cash flow statement demonstrates responsible financial management and increases donor confidence in the organization's ability to use their contributions effectively.

  • Meet grant requirements: Many grants require detailed financial information, including cash flow statements. A well-prepared statement demonstrates the organization's financial stability and how they manage cash flow, making their application more competitive.

 

On This Page

Filtering

Statement of Cash Flow

 

Filtering

All Cash Flow Reports share the same selection page with the same filtering capabilities:

  • Company (Tenant ID)

  • Year

  • Month

  • Parent Fund

  • Budget (for some reports only)

  • Fund

  • Book

  • Department

  • Projects

Statement of Cash Flow

Direct Method

  • Focuses on directly tracking cash receipts and cash disbursements from operating activities.

  • Lists the major operating cash inflows, such as cash received from customers for goods or services, and cash outflows, such as cash paid to suppliers for inventory or staff salaries.

  • Offers a clear and transparent picture of the organization's cash generation from core activities.

  • May require more detailed bookkeeping records to track individual cash transactions.

Indirect Method

  • Starts with net income from the income statement (Revenue and Expenditures report).

  • Adjusts net income for non-cash expenses (depreciation, amortization) and changes in working capital (accounts receivable, inventory, accounts payable).

  • These adjustments account for the timing differences between when a revenue or expense is recognized in the accounting records and when the actual cash transaction occurs.

  • Requires a deeper understanding of accounting concepts to interpret the adjustments.

  • Can be more efficient to prepare, especially for organizations with less complex operations.

Forecast - Direct Method

A cash flow forecast is a financial tool that predicts a non-profit's future cash inflows and outflows over a specific period. It is like a road map for an organization's cash, helping to anticipate potential shortfalls and to make informed decisions about resource allocation. This report is based on actual and is using the budget for the forecast. The month selected in the "Selection Page" will be used as the cut-off date. In the forecast section, months are pivoted into columns. Months prior to the selected month will display actuals, while those after the selected month will display budgets based on the budget version selected.

This report uses the indirect method, which is explained in the Statement of Cash Flow (Indirect Method) section above.

Forecast - Indirect Method

A cash flow forecast is a financial tool that predicts a non-profit's future cash inflows and outflows over a specific period. It's like a road map for your organization's cash, helping you anticipate potential shortfalls and make informed decisions about resource allocation.

This report is based on actuals and uses budgets for the forecasting part.

The month selected in the Selection Page will be used as the cut-off date. In the forecast section, months are pivoted into columns. Months prior to the selected month will display actuals, while those after the selected month will display budgets based on the budget version selected.

This report uses the indirect method, which is explained in the Statement of Cash Flow (Indirect Method) section above.