IN THIS SECTION

• Overview 
• Report Sections
• FX Adjustments
  • Principle of FX Adjustments


  • A note on customising
• Indirect Method

Overview 

The Cashflow Report or Statement of Cashflow Report reports the cash generated and used during the time interval specified and measures how well a company is managing its cash.  It is one of the main company financial statements and helps you to understand the company's operations, where money is coming from and how it is being spent.

Report Sections

The Cashflow Report is broken down into sections as below. The sections that accounts appear in depends on the mappings defined in the Joiin Chart of Account Mappings. In the mappings, each account has a Cashflow Section column and it is this that defines which section the account appears in.

• Net Income - the net income for the period from the P&L
• Cash from Operating Activities - cashflow resulting from the day-to-day running of the business - made up of the Balance Sheet movements of accounts that map to the Operating cashflow section
• Cash from Investing Activities - cashflow resulting from investments such as sales of an asset or repayment of a loan - made up of the Balance Sheet movements of accounts that map to the Investing cashflow section
• Cash from Financing Activities - cashflow resulting from financing such as payments to investors or cash from investors - made up of the Balance Sheet movements of accounts that map to the Financing cashflow section
• Cash at Start of Period - the cash at the start of the accounting period - made up of the Balance Sheet balances at the start of the period (end of the previous period) of accounts that map to the Cash cashflow section
• Cash at End of Period - Cash at Start plus sum of Net Income and cash from activities

NOTE - the Cash at Start of Period section contains balance sheet balances from the end of the previous period - e.g. if you are reporting on the Cashflow for Mar 2021, the balance will be from the balance sheet for Feb 2021. 

The FX rate used will also be the rate from the previous month - to ensure the amounts tie up with the Balance Sheet.

Note on FX - the Activities section of the Cashflow report contains movements of the Balance Sheet accounts from one period to the next. When FX is involved, there are several ways you can configure Joiin to do the conversion - see the Managing FX article for more info.

NOTE on Eliminations - any accounts that you have marked to Eliminate will be eliminated from the Cashflow report - if you do not require this you can temporarily prevent eliminations from being removed by changing the Eliminations settings in Reporting Config. 

NOTE - the Retained Earnings account is not included on the Cashflow Report as it normally includes Net Profit from previous years which is already accounted for in the Net Income section. If, however, you have other postings to Retained Earnings, like Dividends, this will not be accounted for and result in a potential imbalance on the report. We are aware of this issue and are working on a way to automatically deal with it.

FX Adjustments

If you are reporting in a currency other than the entity home currency then FX Adjustments may be added to ensure that the Cash at the Start of Period matches the Cash at the End of Period. 

Principle of FX Adjustments



The FX rate changes from month to month.

 Net Income, Activities and Cash Balances are for a particular Cashflow month and are taken from the P&L and BS for that month, and so are converted using rates for that month.

 They are combined to produce a resulting Cashflow End Balance for the month. This end balance should match the Cashflow Start Balance for the following month.

 But the Cashflow Start Balances for the following month are converted at the following month FX rate - i.e. a different rate. So this results in a difference between the start and end balances - which we add FX adjustments for to compensate for.

 The FX adjustments are calculated by converting the constituent parts of the Cashflow (Net Income, Activities and Cash Balances) for month 1 using the FX rates for month 2 - and then taking the difference.


There are three types of FX Adjustment that may be added to the Cashflow report.

More information on FX Rates can be found in the Managing FX article.

A note on customising

If you customise a Cashflow report, the FX adjustments will be calculated based on how you have set up any new groups in your custom report. Joiin will use the "This group contains" setting to determine which accounts are in the group and whether it needs to include the account balances in there to calculate adjustments.

• Cashflow Cash - accounts in these groups will be included when calculating the Cash at Start adjustment
• Cashflow Activities - accounts in these groups will be included when calculating the Activities FX adjustment

Indirect Method

The Statement of Cashflow may be prepared using either the Direct or Indirect methods - Joiin uses the Indirect method.  The Indirect method differs from the Direct method in the Operating Activities section - because the income statement is on an accrual basis, revenue is recognised as soon as it is earned, not when it is actually received - so the operating activities section on the cashflow statement starts with the Net Income from the Profit & Loss for the period and then makes adjustments from the Operating Activity related accounts on the Balance Sheet.

For more information on the Statement of Cashflows see this external article.