On this page you can download two free, fully editable templates built for different jobs: a 12-Month Cash Flow Forecast in Excel that projects receipts, payments and your closing cash balance month by month and warns you when cash drops below a safe level, and a Statement of Cash Flows in Word (indirect method) that reports operating, investing and financing cash flows for the year with a prior-year comparison.

What Is a Cash Flow Statement?

A cash flow statement is a financial report that summarizes the actual cash received and paid by a business during a period. It starts with the opening cash balance, adds cash inflows, subtracts cash outflows and arrives at the closing cash balance. Unlike the profit and loss statement, which records income and expenses when they are earned or incurred, the cash flow statement only counts money that actually moved in or out of your bank account.

Formal cash flow statements group cash movements into three activities: operating (day-to-day trading), investing (buying or selling long-term assets) and financing (loans, owner capital and dividends). Together with the P&L and balance sheet, it forms part of a complete financial report and the annual report.

Why Track and Forecast Cash Flow?

Many profitable businesses still fail because they run out of cash. A good cash flow template helps you to:

• Avoid cash shortfalls by seeing low months before they happen.
• Plan payments for payroll, rent, suppliers, loans and taxes.
• Time big purchases such as equipment or inventory for months with spare cash.
• Chase late payments by showing how much customer collections matter.
• Support loan applications – banks and investors expect a cash flow forecast.
• Understand the gap between profit and cash in your bank account.
• Make faster decisions about hiring, marketing and growth.

Free Cash Flow Statement Templates (Editable)

1. 12-Month Cash Flow Forecast Template (Excel)

This cash flow forecast template in Excel is a month-by-month cash plan for a full year. Enter your starting cash and the minimum cash buffer you want to keep, then type expected receipts – cash sales, collections from customers, loans received, owner investment and other receipts – and expected payments for suppliers and inventory, payroll and contractors, rent and utilities, marketing, software and insurance, loan repayments, taxes, equipment purchases and other payments.

The sheet calculates total inflows, total outflows, net cash flow and the closing cash balance for every month, and each month’s closing balance automatically becomes the next month’s opening balance. A Cash Status row shows OK in green or LOW in red whenever the closing balance falls below your buffer, and a chart compares net cash flow with the closing balance across the year. In the sample data, an equipment purchase and a tax payment push April below the $10,000 buffer – exactly the kind of warning a forecast is meant to give.

Best for: small business owners, startups, freelancers and finance teams who need to plan cash, budget for big payments or prepare a forecast for a bank.

2. Statement of Cash Flows Template – Indirect Method (Word)

This statement of cash flows template in Word follows the standard indirect-method format used by accountants. It starts with company details – company name, preparer, period from and to, currency and date prepared. The operating activities section begins with net income from the profit and loss statement and adjusts for depreciation and changes in accounts receivable, inventory, prepaid expenses, accounts payable and accrued expenses.

The investing activities section covers purchases and sales of equipment and investments, and the financing activities section covers loans received and repaid, owner capital and drawings or dividends. A cash reconciliation shows the net increase or decrease in cash, opening and closing cash and free cash flow. Every line has current-year and prior-year columns, followed by notes on non-cash transactions and a review and approval block.

Best for: accountants, bookkeepers and business owners preparing year-end financial statements, investor reports or loan documents.

The Three Sections of a Cash Flow Statement

Direct vs Indirect Method

There are two ways to present operating cash flow. The direct method lists actual cash received from customers and paid to suppliers and employees – this is how the Excel forecast works, and it is the easiest method for planning. The indirect method starts with net income and adjusts for non-cash items such as depreciation and for changes in working capital – this is the format used in most published financial statements and in the Word template. Both methods arrive at the same net cash from operating activities.

How to Create a Cash Flow Forecast (Step by Step)

1. Enter your starting cash. Use the actual bank balance at the start of the first month.
2. Set a minimum cash buffer. Many small businesses aim to keep one to three months of fixed costs in reserve.
3. Estimate cash inflows. Base sales and collections on your sales reports and the payment terms your customers actually follow.
4. List cash outflows. Include every regular payment plus one-off items such as tax bills, insurance renewals and equipment.
5. Include financing. Add loans received and the monthly repayments.
6. Review the closing balance. Look for months marked LOW and plan actions – delay a purchase, chase receivables or arrange a credit line.
7. Update monthly. Replace forecasts with actual figures and compare them with your budget.

Cash Flow Formulas and Example

These formulas are used in the templates and are useful for checking any cash flow report:

• Net cash flow = Total cash inflows − Total cash outflows
• Closing cash balance = Opening cash balance + Net cash flow
• Net change in cash = Operating + Investing + Financing cash flows
• Free cash flow = Net cash from operating activities − Capital expenditure
• Operating cash flow (indirect) = Net income + Non-cash expenses ± Changes in working capital
• Cash runway (months) = Current cash ÷ Average monthly net cash outflow

Full-year results from the sample data in the Excel forecast:

Even though the business ends the year with more cash, the forecast reveals a tight spring. Knowing this months in advance gives the owner time to spread the equipment purchase or line up short-term finance. Tracking closing cash and cash runway as a metric in your KPI report keeps cash visible every month.

Tips to Improve Cash Flow

• Invoice promptly and offer easy payment options.
• Shorten payment terms or offer a small discount for early payment.
• Negotiate longer terms with suppliers where possible.
• Keep inventory lean so cash is not tied up on shelves.
• Plan for seasonal dips and set aside cash for tax payments.
• Review recurring costs regularly and cancel unused subscriptions – your expense reports show where money goes.
• Arrange a credit line before you need it, not during a shortfall.

Cash Flow Statement vs Profit and Loss Statement

The profit and loss statement shows whether the business earned a profit over a period, using income and expenses when they are earned or incurred. The cash flow statement shows whether the business has cash, using money that actually moved. A sale made on 60-day credit appears as revenue on the P&L immediately but only adds to cash when the customer pays. Loan repayments and equipment purchases reduce cash but are not expenses on the P&L. That is why you need both reports – download the profit and loss statement template to pair with these cash flow templates, and summarize both in your monthly business report.

Related Report Templates

• Profit and Loss Statement Templates – monthly P&L and income statement.
• Budget Report Templates – compare budget vs actual.
• Financial Report Templates – complete financial summaries.
• Expense Report Templates – record business expenses.
• KPI Report Templates – track cash and other key metrics.
• Annual Report Templates – present yearly results.

Frequently Asked Questions (FAQ)

What is a cash flow statement template?

A cash flow statement template is a ready-made Excel or Word document that records cash received and paid during a period and calculates net cash flow and the closing cash balance. Formal versions group cash flows into operating, investing and financing activities.

How do I make a cash flow forecast in Excel?

Create one column per month and rows for opening cash, each type of cash inflow and each type of cash outflow. Total the inflows and outflows, subtract to get net cash flow, add it to opening cash to get closing cash, and link each month’s closing cash to the next month’s opening cash. The free Excel template on this page includes all of these formulas plus a low-cash alert and chart.

What are the three sections of a cash flow statement?

Operating activities (cash from normal business operations), investing activities (buying and selling long-term assets such as equipment) and financing activities (loans, owner capital, repayments and dividends).

What is the difference between the direct and indirect method?

The direct method lists actual cash receipts and payments. The indirect method starts with net income and adjusts for non-cash items and changes in working capital. Both give the same net cash from operating activities; the indirect method is more common in formal financial statements.

Why can a profitable business run out of cash?

Profit includes sales that have not yet been paid and ignores items like loan repayments and equipment purchases. If customers pay slowly, inventory builds up or large payments fall in the same month, a business can show a profit while its bank balance runs low. A cash flow forecast helps you spot this in advance.

How often should I update my cash flow forecast?

Update it at least monthly, replacing forecasts with actual figures. Businesses with tight cash or fast growth often review cash weekly.

Are these cash flow templates free and editable?

Yes. Both templates are free to download and fully editable in Microsoft Excel and Word, LibreOffice, Google Sheets and Google Docs. You can rename categories, add rows, change the buffer and add your logo.