Fund Flow Statement Format
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What is a Fund Flow Statement?
A fund flow statement is a financial statement that reports the changes in a company’s working capital during a specific period. It is also known as a statement of changes in financial position. It shows how funds have been generated and used during the period and provides information on the company’s sources and uses of funds.
The Fund Flow Statement Format includes information about the inflows and outflows of cash and other assets. It also provides information on the sources of finances, such as proceeds from asset sales or debt issuance, as well as the uses of cash, such as acquiring new equipment or debt repayment.
The Fund Flow Statement Format in Excel is useful for understanding a company’s liquidity, financial performance, and capital structure. Investors, creditors, and analysts often use it to assess a company’s financial health and ability to generate and manage cash flow.
Contents of a Fund Flow Statement:
A Fund Flow Statement Format helps analyse the sources and uses of funds for a business over a specific period. The statement has two sections: the sources of funds and the uses of funds. Here are the table of content of a fund flow statement:
Sources of funds:
It lists the various sources of funds for the business during the period, including:
Cash from operating activities: It includes cash generated from the primary operations of the business. Examples include sales revenue and collections from customers.
Cash from financing activities: This includes cash raised from external sources, such as loans, issuing stocks, or bonds.
Cash from investing activities: It includes cash generated from the sale of assets, for example, property, plant, and equipment or investments.
Uses of funds:
This section lists the various uses of funds for the business during the period, including:
Cash used in operating activities: It is cash spent on the primary operations of the business, such as payments to suppliers and employees.
Cash used in financing activities: It includes cash used to repay loans or dividends to shareholders.
Cash used in investing activities: This includes cash used to purchase assets, such as property, plant, and equipment, or investments.
The net change in cash: This section calculates net change in cash for the business during the period. You calculate it by subtracting the total cash used from the total cash generated.
Opening and closing cash balances:
This section lists the opening and closing balances of cash for the business at the beginning and end of the period, respectively.
Why Should You Prepare A Fund Flow Statement Format?
There are several benefits of preparing a fund flow statement format for a business. They are:
Understanding the sources and uses of funds:
The fund flow statement helps a business understand the sources and uses of funds over a specific period. By tracking the movement of funds, a business can identify the sources of cash inflows and outflows. It can help analyse these activities’ impact on the business’s overall financial position.
Monitoring cash flow:
The fund flow statement format provides an analysis of the changes in the cash position of a business, allowing it to monitor its cash flow more effectively. By tracking cash inflows and outflows, a business can identify potential cash shortages and take appropriate measures to address them.
Identifying cash management issues:
By analysing the fund flow statement format in Excel, a business can identify potential cash management issues, such as delays in collections, overinvestment in inventory, or underutilisation of assets. Addressing these issues can help the business optimise its cash management and improve its overall financial performance.
Facilitating financial planning:
The fund flow statement helps a business plan its financial activities, such as capital investments, dividend payments, and debt repayments. By analysing the sources and uses of funds, a business can plan its cash flow more effectively and make informed financial decisions.
Complying with regulatory requirements:
In some jurisdictions, businesses must prepare and submit fund flow statements as part of their financial reporting obligations. Preparing a fund flow statement format in PDF can help businesses comply with these regulatory requirements and avoid penalties.
The fund flow statement format is a valuable tool for businesses to monitor and manage their cash flow, identify potential cash management issues, plan their financial activities, and comply with regulatory requirements.
How to Prepare a Fund Flow Statement?
Firstly, identify the beginning and ending balance of the cash and cash equivalents account. Also, determine the changes in the other balance sheet accounts during the period you prepare the Fund Flow Statement Format.
Determine the changes in working capital. Take into account the change in current assets and current liabilities. The difference between net current assets and liabilities determines the net growth or reduction in working capital.
Now, subtract the total increases in current liabilities from the total increase in current assets. It determines the net increase or decrease in working capital.
Identify the sources and uses of funds during the period, such as the sale of assets or issuance of debt and the payment of dividends or retirement of debt.
Prepare a net income statement of sources and uses of funds, which shows the total inflows and outflows of funds during the period. Calculate net increase or decrease in funds by subtracting the total outflows from the total inflows of funds.
Prepare the fund flow statement, which shows the net increase or decrease in funds and how the funds were generated and utilised during the period.
Uses of a Fund Flow Statement
A fund flow statement is a financial statement that shows sources of funds and their usage by a company during a specific period of time. Here are some of the benefits of a fund flow statement:
Identifying sources and uses of funds:
A fund flow statement helps identify the sources from where the funds were generated. It also displays how those funds were utilised. It helps a company to better manage its financial resources and plan its future investments.
Analysing the liquidity position:
By analysing the fund flow statement, one can determine the liquidity position of a company. It assesses the company’s ability to repay short-term debts and meet existing obligations.
Measuring the solvency of a company:
A fund flow statement can also help in measuring the solvency of a company. A company’s solvency is determined by its ability to fulfil long-term debts. It is measured by analysing the sources of funds and how they were utilised.
Evaluating the financial performance:
By comparing the fund flow statement templates of different periods, one can evaluate the financial performance of a company. It can identify the areas where the company is performing well and the areas where it needs modification.
Assisting in decision-making:
The information provided in a fund flow statement can assist in making various financial decisions. You can make decisions about investing in new projects, raising capital, or paying off debts.
Thus, a fund flow statement is an essential tool for financial analysis and decision-making.
Benefits of Using Fund Flow Format by Vyapar
1. Easy Organisation of data:
Using a Fund Flow Statement Format in Excel can help to organise financial information in a clear and easy-to-understand way. It lets stakeholders quickly identify key financial data, like cash inflows and outflows.
Accounting Software Vyapar lets you personalise Fund Flow Statement Format with your company logo, address, and other information. You can also add fields to the template to collect any additional data.
It helps in the creation of a professional-looking Fund Flow Statement Format in PDF. You can use it to convey your company’s identity accurately. Fund Flow Statement Formats can help your company stand out from the crowd.
2. Clarity:
Using a consistent Fund Flow Statement Format, you can present your data in a way that is easy to interpret. Even non-financial experts can understand it. It is beneficial when presenting financial data to stakeholders who may not have a background in finance.
Vyapar’s fund flow formats ensure that all important details are included in the statement. It gives clarity and lessens errors and conflicts.
Fund flow formats might help you keep your records organised and accessible. It can help with transaction evaluation and discovering inconsistencies.
3. Accuracy of records:
You can ensure that your financial data is accurately recorded and presented with Vyapar’s Fund Flow Statement Formats. It helps avoid inconsistencies that could lead to inaccurate conclusions.
A Fund Flow Statement Format in PDF presents financial information in a clear and organised manner. It can help ensure that all relevant information is captured and presented accurately.
It avoids uncertainty or misconceptions that may occur if the information is given in an unorganised or unclear manner.
4. Consistency in Documents:
You can assure consistency in your fund flow statements by using the same structure for all statements. It promotes your company as a professional and trustworthy organisation.
The consistent Fund Flow Statement Format is simple to read and comprehend. Each transaction is recorded in the same manner, reducing the likelihood of errors caused by differences in recording methods.
A common format for documenting sources and application of funds ensures that all information is presented consistently. It makes financial paperwork easier to read and understand.
5. Efficiency:
You can save time and effort by using our Fund Flow Statement Formats. It simplifies the process of preparing and analysing financial data. It is particularly helpful for small businesses or organisations that may not have dedicated accounting staff.
Vyapar’s Fund Flow Statement Formats save time and effort by giving staff a clear template. It saves employees and managers time writing and analysing reports, allowing them to focus on other important responsibilities.
Vyapar Fund Flow Statement Formats have certain automatic functions that save time and reduce error risk. Automation can categorise spending and generate reports automatically, saving staff the time and effort of manually tracking and reporting expenses.
6. Print The Format Or Save It To Your Device:
You can create fund flow statements both electronically and physically. You can manually write entries once you print the format.
The user can download the Fund Flow Statement Format for subsequent use. The entire operation is free of charge. It makes your work easy.
Other options exist for printing the tailored format and manually entering the data. The Fund Flow Statement Format in PDF works with all standard sizes and regular and thermal printers.
Useful Features of the Vyapar App For Small Businesses
Maintain Data Security
Backups must be created to ensure the security of all data. To ensure the safety of the data stored in the application, you can use Vyapar to set up an automatic data backup.
Because data is now the cornerstone of all businesses, it is critical to maintain that data secure. Set up timely secure backups or create automatic backups to protect your company’s security.
You can regularly create a local backup of your data for additional safety. It can be stored in a secure area such as a pen drive or hard disc.
After examining the business reports created by the Vyapar billing software, you can also assess your sales data and develop a business plan using the accounting features of Vyapar billing software.
Monitoring Your Company’s Cash Flow
Businesses may keep track of invoices with Vyapar’s billing and accounting software. It improves the efficiency with which payments are tracked and handled.
You can keep track of your current payables and receivables using Vyapar. Your company’s cash flow ensures you have enough cash to continue operating.
The dashboard can highlight and remind you to pay recurring expenses without missing EMI payments. Knowing your financial flow may help you make faster decisions.
It will ensure efficient operations and aid in debt reduction. Accounting and billing are two critical functions that rely on adequate cash flow management.
Easy Bank Account Management
You can handle your cash flow by sending and receiving money through bank accounts and making bank-to-bank transfers. Vyapar invoicing software is perfect for businesses because it can be used for all cash-ins and cash-outs.
A business bank account must be linked to Vyapar Accounting Software to use the bank accounts feature. The Vyapar app allows you to manage credit card, O.D., and liability accounts.
Payments for both online and offline businesses can be readily added, managed, and tracked. You may rapidly enter data into the free billing software, whether your revenue comes from banks or e-wallets.
You may handle check payments and manually change the amount using Vyapar’s free accounting software. The Vyapar App provides open checks, allowing users to deposit or withdraw funds and cancel them instantaneously.
Payables and Receivables
Users can record all transaction data in our Fund Flow Statement Format in Excel and keep track of their company’s cash flow in real-time. The software may keep track of the party’s payables and receivables.
Your technique for protecting transaction data is now more secure. Using the app’s company dashboard, you can keep track of the money you need to receive and pay. You’ll have little issue determining who did it.
Set up payment reminders via WhatsApp, SMS, or email to ensure these clients pay their invoices on time. Using the bulk payment reminder option, you may save time by reminding all of your customers to make payments simultaneously.
The software used to generate GST sales reports performs the relevant computations automatically. Using Vyapar’s cash flow management system, you may avoid taking on too much debt and revisit your company plan.
Create Reports
Making informed judgements is essential for organisations to stay on a steady growth path. Use our free billing software to generate 37+ business reports that will meet your requirements.
Vyapar accounting software includes professional daily sales report types. When you use Vyapar, the convenience with which you may export reports in Excel or PDF greatly increases your company’s operational efficiency.
Users may instantly examine and analyse data in daily sales reports with our free GST Invoicing & Accounting Software. You may create graphical reports with the app to keep track of sales and spending.
This free programme is an efficient approach to examining the profit and correct business statistics, accounting swiftly, and many other things.
Thermal/Regular Printer
If you require your invoice to be produced in a specific format, such as shop bill format or Excel templates, our free sales report generating programme is the best alternative.
With Vyapar sales reports, you may print the generated reports in a matter of minutes, and it works with thermal and traditional (laser) printers. Plug up your regular/thermal printer or connect the app through Bluetooth to start printing bills.
Because thermal paper sizes 2″ and 3″ and other custom paper size options are available, you have a better possibility of quickly making prints in all relevant sizes, including conventional paper sizes A4 and A5.
You can use the free Inventory Management Software Vyapar printing bill generator app to create professional sales reports and send them to your customers. You may completely edit it, choose from various Excel, Word, or PDF formats, and print it for your clients.
Frequently Asked Questions (FAQs’)
A fund Flow Statement is a statement of sources and applications of funds. It helps businesses assess the changes in working capital and whether it has been used to its optimum utilisation.
The two main components of a fund flow statement are:
1) Sources of Funds
2) Application of Funds
The format of the fund flow statement is as follows:
1. Sources of Funds – It shows the inflow of cash.
2. Application of Funds – It shows the outflow of the cash.
A fund flow statement shows the reasons for fluctuation in profit and loss of business. A fund flow statement examines how money moves inside a company and how it affects working capital. It uses the balance sheet of two consecutive terms to comprehend the inflow and outflow of funds from the previous financial year to the current year.
