Operating Activities shows cash generated from day-to-day business: collections from customers, payments to vendors, and salary payments. In Zoho Books, this section is prepared using the indirect method, starting with net profit and adjusting for non-cash items (depreciation, changes in working capital).
Investing Activities shows cash used to buy or sell long-term assets: purchasing equipment, selling a vehicle, or acquiring investments. Financing Activities shows cash from borrowing or repaying loans and from owner contributions or drawings.
A business can show a profit on the P&L and still run out of cash. This happens when customers take 90-day credit while vendors demand 30-day payment, creating a working capital gap. The Cash Flow Statement in Zoho Books makes this gap visible. If Operating Cash Flow is consistently negative despite reported profits, it signals that receivables are growing faster than collections, a warning sign that requires urgent attention.
Indian businesses with seasonal revenue, such as those supplying to government departments (where payments cluster after budget releases), use the Cash Flow Statement to plan short-term borrowings. By comparing the statement month by month, finance teams can identify which months will require an overdraft and negotiate credit facilities in advance.
The Cash Flow Statement in Zoho Books is a financial report that shows all cash inflows and outflows during a period, organised into operating activities, investing activities, and financing activities, revealing how cash moves through your business.
Go to Reports, then Business Overview, and select Cash Flow Statement. Choose your date range and click Run Report. Zoho Books generates the statement using the indirect method, starting from net profit and adjusting for non-cash items.
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