Cash Flow: What is it and how to do it in a simple way?

Dashboard Cash Flow
Graphical Analysis of Cash Management
Excel Spreadsheets

O cash flow is the main tool of gestão financeira of any size. It consists of the registration of financial inflows and outflows (sales, purchases, investments, etc.), for further analysis and planning of the discharge of the bills to pay e Bills to receive Organization.

We will see in this article:
What is Cash Flow?
When to Use Cash Flow?
Types of Cash Flow
The role of financial management in companies
Cash Flow Statement: 5 Steps
Possible Cash Flow Applications
Make Your Cash Flow

Cash Flow Worksheet in Excel

What is Cash Flow?

cash flow, known in English as cash flow, it is nothing more than the management of what enters and what exits (in monetary values) of your company in a period.

Also known as cash control, you should include chart of accounts, record of releases, bills to pay, Bills to receive, charts and reports. Throughout the post we will see how to make your cash flow in practice, but before that, let's understand its main concept.

It sounds simple, but think about the scenario that most companies usually face. Most accounts mature on the 5 day of each month, while sales are made throughout the month. There is a clear cash mismatch.

Without planning, it is very common that the company does not have enough cash to employee payroll on 5 day.

Cash shortage
No planning ...

When to Use Cash Flow?

Business cash flow is the most important financial management tool. No matter the size or sector, they all need to be clear control of what goes into and out of the box. In addition to what is to win to pay and to receive.

Because it is a crucial instrument of financial management, cash flow must be used daily by companies or even self-employed professionals. After all, only then will you be able to know the flow of money that goes in and out of your company and keep accounts up to date, that is, a healthy business.

Types of Cash Flow

The exercise of cash flow consists, as previously accounting for financial transactions. Management can be done in the cash and regulatory regimes. Some companies do this in two ways:

Cash scheme

When the cash management is done using the dates of the transactions as inputs and outputs of cash values. The positive point is that the cash flow becomes a faithful view of the bank's cash holdings. The downside is that the reviews may be distorted due to late payment. One company may find that it made a profit in a month in which it was received for several late sales, for example.

Accrual method

When the cash management is done using the transaction dates as the when they are signed. A sale on 6x, for example, enters the accrual regime as soon as it is agreed.

Many companies use cash control on a cash basis and Statement of Income (DRE) to make the control by the regime of competence.

The management itself can be done in several ways (systems, spreadsheets, notebooks). I recommend using a spreadsheet, as these are flexible, easy to implement and are capable of providing all the necessary analyzes.

Operational Cash Flow

O operating cash flow is the record of only the cash flows of the company directly linked to the operation. For example, financial transactions, such as interest and income, and acquisition of fixed assets are excluded.

Free Cash Flow

O free cash flow is, in general terms, the remaining balance in the cash after all payments and accounting deductions. It is heavily used in financial projections and valuation of the company because it signals the potential for dividend payments from a company. Its calculation is simple ... it is the operational cash flow deducted from acquisition of fixed assets, depreciation and amortization.

Cash Flow Worksheet in Excel

The role of financial management in companies

A gestão financeira is the activity that allows other areas of the company to continue breathing. For starters, all areas need a budget, in other words, know how much they can spend and invest. Secondly, it is necessary that someone materialize and monitor the expenses and investments mentioned.

The financial ends up being a central area, for communicating with all areas. Its importance is so visible in large companies, that often the Chief Financial Officer ends up being the President's natural successor.

In any company, good financial management starts with good cash flow management. It is the most basic way to track financial records and make decisions based on data. From the cash flow, other financial activities can be developed.

The cash flow statement is one of the financial documents used to compose the accounting of a company. Most organizations look at the accounting exercise only as tax compliance. This attitude greatly underestimates the importance of accounting, which ends up being left out.

Accounting is the science that studies the assets movements (assets, rights and obligations) in organizations. It is through this that the main financial reports are generated that will guide the company into the future. Bad accounting makes the company pay more taxes and lose financial and credit opportunities.

A importance of accounting and financial management as a whole, can be portrayed through 5 benefits:

  • Meet deadlines for payment and receipt
  • Knowledge of financial indicators
  • Data-based decision making
  • Trusted company history record
  • Comply with tax obligations

The first step in making a reliable accounting management is to have your company's cash flow organized and updated.

Cash Flow Statement: 5 Steps

Step 1 - Chart of Accounts

The purpose of the chart of accounts is to separate incoming and outgoing money into categories. This step is critical for further analysis.

In our spreadsheet, we have available the following categories: Product Expenses, Services Expenses, Non-Operating Expenses, Expenses with RH, Operating Expenses, Marketing Expenses, Taxes and Investments.

However, you can use the accounts that best fit your enterprise. In our same worksheet, they are customizable.

Start categorizing your cash outflows (costs, expenses and investments). To illustrate this step, check out the image below with a portion of the Expense Plan:

Expense Account Plan - Excel Cash Flow
Cash Flow - Chart of Accounts (Expenses)

Then, separate the money entries into categories. In our spreadsheet, the categories are: Product Revenues, Service Revenues and Non-Operating Revenues. But remember to use the categorization that best suits your company.

Check out the image below to better visualize how the Recipes in the Chart of Accounts are:

Cash Flow - Revenue Accounts Plan
Cash Flow - Chart of Accounts (Revenues)

A well-made spreadsheet allows you to modify the categories and has the automated result for the rest of the file.

Step 2 - Financial Releases

Now that you have set up your chart of accounts, you can perform the entries of entries and exits (transactions) daily, as shown below:

Cash Flow Worksheet - Postings
Cash Flow - Launches

Financial postings are nothing more than the recording of the largest number of information (without losing the objectivity) of the transactions carried out.

In our spreadsheet cash flow the balance of launches are available in the right corner, which are updated automatically from each new entry or exit, allowing you, as the person responsible for finance, to have an overview of your cash flow.

Cash Flow Worksheet in Excel

In the image above, we see the entry of R $ 1.500,00 for the item Marquinhos, which was classified under HR Expenses, in the “Salaries” Chart of Accounts and has the status of paid because the payment date has already been entered. This means that, on the payment day in question, this expense was realized and accounted for in the cash flow. If you want, you can do this process for any type of present or future posting (just don't enter the date to leave the posting open and only insert it when the transaction actually occurs).

Step 3 - Review of Releases

After making the launches, the simplest way is to understand and find the final daily balance. To do this, one must calculate the value of the entries subtracted from the value of the outputs and add it to the starting balance.

In our spreadsheet, in the Summary: Launches item, we have already calculated the day's balance automatically, as the information is provided. Here you can see the fluctuations throughout the month.

For example, if there are more payments at the beginning of the month and more receipts at the end, the analysis of these data allows for greater monthly and, consequently, annual financial preparation.

Excel Cash Flow
Cash Flow - Launches per month

In this item we provide a summary with the Total Income, both for the day, as for the month shown, in addition to the Total Expenses for the day and period.

Tip: A good record of the postings that have not yet been paid or received, also known as Accounts Payable and Accounts Receivable, allows the company to have a higher Need for working capital.

Step 4 - Cash Flow Statement

Now that we have gone through all the filling, you need to intensify the analysis of results, that is, the consolidated cash flow and different reports that can be taken from it.

Using our cash flow in excel as an example, first, let's look at the Consolidated Results. They show the general overview, month by month, of the company's cash flow. To have a better understanding, look at the figure below:

Cash Flow Sheet
Cash control statement

The consolidated control provides the Initial Balance, Revenue, Expenses, Profit / Loss, Accumulated and Profitability for the month.

It is important to highlight that, in this spreadsheet, in addition to controlling the cash flow, it is also possible to analyze your DRE and control the Accounts Payable and Accounts Receivable. Finally, you can see graphs and make more visual analyzes.

Online Cash Flow Course in Excel

5 Step - Graphical Analysis

Finally, it is important that your cash management returns graphical analysis. This type of analysis, more visual, lets you know that everything is okay, or that something is wrong, just beating the eye.

Some recommended graphics to extract from your cash flow:

1. General Financial Analysis by Month - inflows, outflows and balance throughout the year

2. Recipes - by type, so you know the most relevant and insignificant entries. Remember when we recommend categorizing the entries? Here, this step is important.

3. Expenses - by type, so that you observe monthly fluctuations and make cuts in the correct accounts.

4. Bills to pay bills to receive - essential for cash flow planning.

Dashboard Cash Flow
Graphical Analysis of Cash Management

and also other graphics like:

5. Cash requirement - opening balance of the period plus the entries subtracted from the exits.

6. Accumulated balance - if done correctly, should match the sum of your cash availabilities (cash register, banks, applications, etc).

As you can see, in our spreadsheet, the graphs are automatically generated based on the information provided in the other tabs, through Dashboards. With them, it is possible to have a view of income and expenses separately, in addition to analyzing whether there is a need for cash, whether there was profitability and what was the Annual Income Statement.

In addition, the first graph, from Financial Analysis, already gives us a overview of finances, month by month.

Cash Flow Worksheet in Excel

Possible Cash Flow Applications

Elaboration of a management plan of accounts

A chart of accounts allows a company to rank its revenues and expenses. The objective is to classify financial launches and then investigate, through cash flow, which lines of revenue (products and services) to expand, and which costs to cut.
Learn more: What is and how to make a managerial account plan?

Elaboration of the DFC: Statement of Cash Flow

The cash flow statement is a simple report that shows the cash receipts and exits and the balances (start and end). It can be daily or monthly.
Learn more: How to make a DFC, Cash Flow Statement?

Reduce company costs

It is through the cash flow that an organization can analyze the evolution of its spending lines by type before making cutting decisions.
Learn more: How to reduce costs with Cash Flow?

Make financial projections

Successful financial projections, that is, with a smaller margin of difference as compared to the realized, depart from the historical. Cash flow is the best friend of a financial projection. From it, we can find out if there is seasonality. In other words, how the company's revenues and expenses behave throughout the year.
Learn more: How to make financial projection in Cash Flow?

Make bank reconciliation

The cash flow, when done right, ends up becoming a bank managerial registry of the company. To do this, the company needs to keep its cash launches updated by bank checking if the balances (bank and DFC) are equivalent.
Learn more: How to do bank reconciliation in Cash Flow?

Control installments and payments

When the company makes a sale or an installment purchase, the financial manager can already provision all the installments by making future postings to the cash flow. In this way, the company will know more or less how much it is expected to enter and exit the cashier in certain periods.
Learn more:
How to make installments in Cash Flow?

Manage customers and suppliers

Cash flow can help the company understand who your most profitable and costly customers and suppliers are. For companies working on projects, this vision becomes particularly special. Because they can know their inputs and outputs per customer to make future adjustments to customer accounts.
Learn more: How to manage customers and suppliers in Cash Flow?

Control the budget

Companies that define budgets by account or by area are able to control them and make adjustments through cash flow analysis.
Learn more: How to do budget control with Cash Flow?

Conduct financial advice

When a company starts performing any financial consulting project whatsoever, the first financial document it will ask for, will always be the cash flow report, as it is the heart of financial management.
Learn more: Using Cash Flow in a Financial Consulting

Make Your Cash Flow

Cash control is essential for efficient and effective financial management. Besides providing peace of mind to the manager, it enables the forecasting of future entries and exits, aiding in decision making.

If you are interested, you can click on the banner below and see our Cash Flow Worksheet in Excel, ideal for any company, of any size or industry, control and organize your financial!

Cash Flow Worksheet in Excel

Cash Flow is a crucial topic for any company, no matter their size. It is the first step of a financial management of excellence and, unfortunately, a little subject approached in the superior courses of administration of Brazil.

However, for us in the LIGHT, it is always a huge pleasure to talk about cash flow! It will be an honor to hear your experiences on the subject and to help with your difficulties. Just leave a comment below!

Excel Spreadsheets


  1. Good afternoon, I had to insert a column in the expenses field, in the chart of accounts area, and in the DRE field this field did not reflect leaving the spreadsheet without this item in the report, how do I make this column reflect in the DRE?

  2. Hello .. Good night

    The Cash Flow worksheet has an exceptional proposal, however when using it I came across an insufficient number of lines for a monthly routine of information on entering and leaving a company. And when it comes to editing the spreadsheet, it is not possible to try to insert it because it messes with a lot and the process is very complex, the risk of reflecting an error up front is very high, it is not worth it. It would be a suggestion to leave a favorable number of lines.

  3. Dear Good morning !!!
    Doubt about accounts receivable.
    I have a feature in my business that is a card receivables schedule of up to 12x, meaning I have long receipts every day throughout this period.
    In the cash flow spreadsheet I did not see a field or part in which I can place these receipts, separated by flag or adiquirencia.
    Is there any solution within this 4.0 cash flow spreadsheet for this?

  4. Cash flow must have all the cash that came out of your company cashier. If you left R $ 1500, should include this value, if only R $ 1380, you should enter this value. The cashier analyzes the company accounts, so it does not matter if it is salary, commission or other expense, if it came out of the bank account of the company, it should be accounted

  5. Hello, a question regarding employee pay.
    Is the salary to be posted to cash flow the net or the gross salary?
    In the company we have in the holerite:
    (+) 1500,00 monthly salary
    (-) INSS 120,00
    (-) Health plan 150,00
    (-) Purchases made by the employee in the company 100,00

    I was asked to post in the cash flow the Net Salary + health plan + purchases = 1380,00
    that's right?

  6. I am very impressed with the discovery of the cash flow sheet I would like to deepen the knowledge I am Mozambican, small entrepreneur in the creation of chickens and I did a course of accounting I would like to plan my income and expenses to know if the business is viable to give continuity.

  7. Good day.
    Very interesting even this worksheet, I'm fascinated with the content presented. I've never seen a spreadsheet so complete, so I ask: How can you leave a column with a hyperlink and then make such a magnificent interaction?

  8. Hi Fabio, everything good? Thanks for message! Yes, you can replicate so keep the reference to our blog telling us that the content is ours. In addition, we also have an affiliate program for sales of our spreadsheets. Would that interest you? If you want more details, please send me an email to [email protected]!


  9. Hello, I have a site that has a vocational course and we explore it a lot, I would like to know if I can replicate your posts in my blog, without deleting references and modifying content, including the links with your spreadsheets. What do you think?

  10. Good afternoon.
    In my company we set up a monthly and annual projected cash flow, my part is to design the company's receipts, we take as basis for the assembly of the flow the billing closed of the month plus the estimated revenue by the planning area. With this we were able to design the monthly one.
    However, the annual flow creates a receipt curve that projects the other receipts as a function of the sales deadline, this curve is an estimated percentage of each month's sales of the installments that will mature according to the average sales term, I am new to the company and frankly I know how it was created and if in fact the model used is the most effective, I would like to better understand how to make a receipt projection curve. Hugs.

  11. Felipe speaks

    I already answered your email, so I'll let this chat continue there, but it will be a pleasure to contribute to your blog! Hugs

  12. Thanks for the contribution. Would you like to contribute with a text of yours talking about the power of spreadsheets and, perhaps, exposing your personal experience?


  13. Interesting as the post and your blog addresses various financial difficulties and solves them through spreadsheets. I do not know anyone else who does a good job as well as you.

    I would ask a favor from you. I have a blog about personal finance and I approached the same theme of cash flow for business and wanted your opinion there in the comments saying what could be added.

    I know there are many requests for comments to approve but if I find an opportunity to do what I ask, I will be deeply grateful.

    Congratulations Leandro!

  14. Okay, so the best way would be to treat this situation as parcels, transforming the launch of $ 100 into two parcels of R $ 50,00 for example. This makes it easier to manage. Thank you, hug.

  15. Hi Humberto,

    In this case, you should try to reflect exactly this behavior in your cash flow, posting this entry as payment in installments and "writing off" when payments actually come in, ok?


  16. Hello, good evening, first of all, congratulations to the work, I recently visited the blog and I am learning a lot about financial management.
    I have the following doubt about the cash flow, I usually have partial receipts here in the company, for example, for a $ 100,00 release the customer ends up paying in 2x, R $ 50,00 on the due date and the other R $ 50,00 after a few days or even next month. How do I cash in on this situation?

  17. I really thought that was it. Glad you're solving the problem on your pc and the spreadsheet is already working. Hope you enjoy! Hugs

  18. Hi Rafael. I received the worksheet and was able to open it on another machine, even in .xlsx. The problem is with this machine, I'll see if I can get support on, as I'm having trouble opening other package documents with the same message. Thank you for your attention and your help.

  19. I just sent you the spreadsheet in xls format. I hope it solves the problem that was happening, but anything is just talking to me again. Hugs

  20. Hi Bauto,

    It really is very strange what is happening, since here in our computers it works perfectly (we did tests with mac and different windows and it always worked).

    Can you send me your email? I'll send an earlier version of the worksheet to see if it overcomes these issues

  21. Good morning, Leandro.
    I downloaded the worksheet, but I can not work on it. I think it is not the I.Explorer, but rather some configuration of Excel itself or the machine, which I could not change.
    Follow the picture of the message.

  22. I've downloaded other spreadsheets from you, but I can not do anything with them since I get messages that my computer policy does not allow the gift list worksheet. I've done everything I knew, in security settings, but it did not work out. Spreadsheets from other vendors, websites, forums, etc., I can open normally, including with Macro and VBA.
    Can you help me?


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