The Importance of Cash Flow Statements (And How to Prepare Them)

Blog / Accounting

The Importance of Cash Flow Statements (And How to Prepare Them)

Effectively managing and monitoring a company’s cash flows serves many purposes. Not only does this information enable stakeholders to monitor and prevent company debt, it also prevents unnecessary expenditures from interest, late payment penalties and debt costs, while ensuring timely investment and cash flow available for investment opportunities.

Cash flow statements are an ideal way to showcase how much cash a company started a period with, how they spent and received cash, and the ending cash balance that is available to be used for future investments of distributions. Unlike other financial reports, cash flow statements do not include any future expected cash payments.  Instead, cash flow statements show only cash that has physically entered or left a company.

We recently partnered with our friends at Lendified on an article showcasing the importance of cash flow statements. In the article, we outline what a cash flow statement consists of, how to successfully prepare a cash flow statement, and provide examples of what a business is capable of when they have a better insight into their financial situation.


Lendified is Canada’s fastest growing online lender for small businesses, providing cutting-edge lending and funding technology to financial institutions throughout Canada and the United States. Using their system, small businesses are able to qualify for funding from anywhere, at any time. Simply apply online, receive a quote, and receive your funding!

Need help preparing cash flow statements for your business?

Our team of experienced bookkeepers and accountants provide catch-up & ongoing bookkeeping services, financial reporting, and accounting analytics. Get in touch today to learn more about how our team can help!

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We thoroughly research and test the apps we include in our regular workflow for Client bookkeeping services. After deciding on criteria for evaluating the software and then researching the app itself, we tested the app, noting its strengths and weaknesses. We then work with the app for at least a few weeks before deciding whether to recommend it to our readers. We use the software as it was designed for its intended tasks. For a detailed walk-through of how we select and evaluate software, please see the details of our process.

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Omar Visram
About Omar Visram
Omar Visram is the Co-founder and CEO of Enkel Backoffice Solutions Inc. Headquartered in Vancouver, Enkel provides bookkeeping, payroll, accounts payable and accounts receivable services to over 300 organizations Canada-wide.