How to Generate Indirect Statement of Cash Flows

Overview:

The Cash Flow Statement (Indirect Method) shows how changes in income and balance sheet accounts affect cash and cash equivalents.

In QNE AI Cloud Accounting (QCA), this report starts with Net Profit and adjusts for non-cash transactions and changes in working capital. The result provides a clear view of your company’s cash position and liquidity, helping you reconcile accounting profit with actual cash flow.

Scenario:

You’re preparing financial statements for board review and need to present a clear picture of how cash moved during the reporting period. You want to reconcile net income with actual cash flow, highlight major inflows and outflows, and ensure the report matches your General Ledger and Trial Balance. You also need to export the report for audit and compliance documentation.

Solution:

1. Navigate to the report.

Go to Reporting > Report Center > General Ledger > Other Reports > Indirect Statement of Cash Flows.
 

2. In the Report Criteria window:

• Set the Date Range to define the reporting cut-off (e.g., end of the current month).

• Then apply the necessary filters to generate the desired report results
  

3. Click Preview to generate the report.
 

4. The report is grouped into three sections:

• Operating Activities

• Investing Activities

• Financing Activities

Each section displays balances for the selected period, showing how accounting profit reconciles to actual cash movement.

Application:

• Liquidity Management: Review operating cash flows to assess whether core business activities are generating sufficient cash to sustain operations.

• Investment Oversight: Monitor cash used in investing activities to evaluate capital expenditures, asset acquisitions, or divestments.

• Financing Strategy: Track cash inflows and outflows from loans, equity injections, or dividend payments to guide funding decisions.

• Audit & Compliance: Provide auditors and finance teams with a transparent summary of cash movements, reconciled to net income and balance sheet changes.

• Board Reporting: Present a structured view of cash flow dynamics to support strategic planning and financial oversight