Ask Lou

The Cash Flow Statement

How cash moved through your business, and how Ask Lou shows you it ties out.

Northwind ManufacturingStatement of Cash Flows · December 2025Ties to balance sheetOperating ActivitiesNet Income40,950Depreciation22,500Decrease in accounts receivable36,700Increase in inventory(22,600)Decrease in accounts payable(28,400)Net cash from operating activities49,150Investing ActivitiesNo investing activity this period—Financing ActivitiesRepayment of notes payable(25,000)Net cash from financing activities(25,000)Net change in cash24,150Cash at beginning of period388,150Cash at end of period412,300

What it shows

Cash from operating, investing and financing activities, starting from net income and adjusting for the changes in your balance sheet. At the bottom: the net change in cash, and your beginning and ending cash.

Choose year-to-date or a single month, your rounding and your template.

Does it tie out?

At the top, Ask Lou tells you plainly: Statement is balanced, or Statement is off by the amount, with a list of the items needing attention. Choose Ask Lou why the statement doesn't tie and he walks you through it.

What makes it tie: your cash flow mappings

Each line of the cash flow statement needs to know which of your accounts sit behind it. That's set up once on the Reconciliation page, with Ask Lou recommending the accounts for each line, and it's what turns your balances into a cash flow statement that ties. Fixed asset and loan schedules feed it too.

We cover it in detail under Assets, Debts & Reconciliation.

How your cash flow statement ties out
  1. 1Your balances come in

    From your monthly trial balances.

  2. 2Your accounts are mapped

    Each cash flow line is set up with the accounts behind it, on the Reconciliation page.

  3. 3The statement is built

    Starting from net income, then the changes in your balance sheet accounts.

  4. 4It checks itself

    "Statement is balanced", or the amount it's off by, with the items needing attention.