How to make a cash flow chart for your business

A cash flow chart can be one of the most helpful tools in your business’s toolbox. It’s a neat visualisation of your incomings and outgoings to help clarify what your company is doing with its money and how it’s faring financially.

With such a clear visual representation of your cash flow statement, informed strategic decisions can be made faster and more decisively, and putting together a cash flow chart is quite straightforward, thankfully. Let’s go over the basics.

What is a cash flow chart?

Cash flow represents the net amount of money leaving and entering your business – cash received, and cash spent. A cash flow chart takes these figures across a range of weeks or months and uses them to plot a graph that you can trace to see when your business is at its most profitable and when it's losing money.

The purpose of a cash flow chart is to provide a detailed picture of what happens to a business's cash during a specified period, known as the accounting period. It demonstrates the business’s ability to operate in the short and long term, based on how much cash is flowing into and out of the business.

Getting these simple insights from potentially complicated cash flow statements can be difficult depending on the size and complexity of your operation. It was a much more complicated process before the onset of digital transformation, when financial planners had to manually draw cash flow charts from the information available. Today, it’s a relatively painless process.

Creating your cash flow chart

There are plenty of cash flow generator apps online letting you input your data and generate a chart based on it. But if you create your own chart, you can alter it as and when new data emerges to gain a progressive picture of your business.

Creating a cash flow chart in Excel or Google Sheets

Microsoft Excel and Google Sheets both feature basic cash flow chart creation tools, so you can select your cash flow statement and generate a chart based on its figures. The results, however, lack any high-level insights. There are third-party tools that can be added to both, to generate more reliable and insightful charts.

On both spreadsheet platforms, the most basic chart can be created with just three sets of figures – the month, cash balance and net cash flow. Place these into three separate columns from January to December for each year and use the tools within your platform of choice to create a chart. What you’re left with is an easy-to-read visualisation.

Cash flow projection chart

Of course, being able to generate a chart that projects future cash flow via a cash flow forecast is an incredibly powerful business tool. This is your cash flow forecast and can be as simple or as complex as you want it to be. At its most basic, it’s simply a calculation of the cash you are expected to bring in and spend over the next period.

To create this chart, you’ll need your: 

Beginning cash – The amount you start with, which you can gather from your latest cash flow statement.

Projected inflows and outflows – What your business expects to make in a given period. This can be generated by looking over what you made and lost in previous years and any future invoices waiting to be sent or received.

Your cash flow forecast is your beginning cash + projected inflow. Use this to generate a cash flow projection chart, which can help you to make strategic business decisions and improve your cash flow.

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