Growth CircleHow to Build a Monthly Cash Flow Statement
A step-by-step way to track cash in and cash out each month, and to forecast the next three months.
Profit tells you whether the business is earning. Cash flow tells you whether you can pay your bills. You need both.
Step 1: Start with opening cash
Add bank balances and cash in hand at the start of the month.
Step 2: List cash received
Include customer collections, other income, loans received and any capital brought in. Use actual money received, not invoices raised.
Step 3: List cash paid
Group payments into vendors, salaries, rent, taxes (GST, TDS, income tax), loan repayments, and capital purchases.
Step 4: Calculate closing cash
Opening cash plus receipts minus payments should match your bank statements. If it does not, find the difference before moving on.
Step 5: Forecast the next three months
Use expected collections from your receivables list and known payments such as salaries, EMIs and tax dates. Flag any month where closing cash looks low, while you still have time to act.
Review habit
Look at it weekly if cash is tight, otherwise monthly. Focus on overdue receivables, upcoming large payments and tax outflows.
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