IN THIS SECTION

• Overview 
• Report Sections
  • Indirect Cashflow Sections
  • Direct Cashflow Sections
• FX Adjustments
  • Principle of FX Adjustments


  • Other FX Adjustments
  • Switching off the FX adjustment
  • A note on customising
• Retained Earnings

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.

The Statement of Cashflow can be prepared using either the Indirect or the Direct method. Both arrive at the same Cash at End of Period; they differ only in how the Operating Activities section is shown.

You can select from the two different methods using the Layouts dropdown:

Cashflow (Indirect Method)

The standard Cashflow report uses the Indirect method. Because the P&L is prepared on an accrual basis, revenue is recognised as soon as it is earned, not when it is actually received. The Operating Activities section therefore starts with the Net Income from the P&L for the period. It then adjusts for the movements in the Operating Activity related accounts on the Balance Sheet, such as debtors, creditors and stock.

Cashflow (Direct)

The Cashflow (Direct) report uses the Direct method. Instead of starting from Net Income, it shows operating cash by source: cash received from customers, cash paid to suppliers and employees, interest and tax, and other operating activities.

Each line is derived from the P&L accounts and their related Balance Sheet movements. For example, Cash received from customers is Revenue plus the movement in debtors. This means the figures come from the same account balances as the standard Cashflow report, not from individual bank transactions. Net cash from operating activities equals Net Income plus Operating Activities on the standard Cashflow report, and Investing Activities, Financing Activities and Cash at End of Period match it exactly.

NOTE: the figures are net of sales tax, because the P&L accounts are held net of tax. The individual lines will therefore not match a direct cashflow from your accounting system that shows gross amounts, such as Xero's Statement of Cash Flows with the Gross option.

NOTE: We are also working on a transactional version of the direct cashflow report. It will be built from your actual bank receipts and payments rather than from account balances, so the figures will be gross and will match your accounting system line by line.

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, Account and Account Type column and it is these that defines which section the account appears in. You can see how this works in more detail in our Auto Include article.

Indirect Cashflow Sections

• Net Income - the net income for the period from the P&L
• 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
• 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
• 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

Direct Cashflow Sections

• Cash received from customers - Revenue from the P&L, plus the Balance Sheet movement of debtors (Accounts Receivable accounts and the debtors control account)
• Cash paid to suppliers and employees - Cost of Sales, Overheads, Fixed Expense and Variable Expense from the P&L, plus the Balance Sheet movements of creditors (Accounts Payable accounts and the creditors control account) and Inventory
• Interest and tax - Interest Expense and Tax Expense from the P&L
• Other operating activities - Other Income and Other Expense from the P&L, including interest received
• Depreciation & Amortisation - the depreciation and amortisation charge from the P&L. This is a non-cash item, and it is cancelled out by the movement in accumulated depreciation, which sits in Movements in working capital or Investing Activities depending on its mapping
• Movements in working capital - Balance Sheet movements of the other accounts that map to the Operating cashflow section, such as VAT, prepayments and accruals
• Net cash from operating activities - the sum of the six lines above

Plus Investing Activities, Financing Activities, Cash at Start and Cash at End as in Indirect Cashflow.

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 sections of the Cashflow report contain 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 for Sage users - Sage does not tell us which accounts are the debtors and creditors control accounts. On Sage, their movements therefore appear in Movements in working capital instead of in Cash received from customers and Cash paid to suppliers and employees. Net cash from operating activities and Cash at End of Period are not affected.

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. They all appear under the FX Adjustments line which you can expand to see the individual adjustments.

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

Other FX Adjustments

There also may be an adjustment required due to Eliminations.

FXC04 - Joiin FX Adjustment (CELIM)

This makes an adjustment to address the difference caused by eliminated inter-company balances being converted at each company's own FX rate, so that Cash at End of Period ties to the next period's Cash at Start.

Switching off the FX adjustment

You can prevent Joiin from automatically adding these adjustments by switching off the "Add Cashflow FX Adjustment" flag in the settings as mentioned in this 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 layout. 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

Retained Earnings

The Retained Earnings account is not typically included on the Cashflow report. However, if manual changes have been made to Retained Earnings, for example to issue Dividends, then these changes should be reflected on the Cashflow report. Joiin will include these changes. If this is causing any issues it can be switched off in Report Settings.

NOTE: When currency conversion is involved, the journal amounts used in the Retained Earnings adjustments are also converted, and due to the addition of other Cashflow FX adjustments, may be spread across multiple months and so not always be directly relatable to the underlying journals.

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