It must be stressed that cash flow analysis is a projection of cash flow and relies on payments coming in and being paid as they fall due. This can vary widely depending on the type of business and customers, and how diligently bills are being paid on time.
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Note: The opening balance amount in Cash Flow Analysis reflects the start of the day balance, and is not a live balance as the current day's transactions have not yet been finalised. |
Other factors include ensuring credits are fully allocated in both debtors and creditors, and moving purchases from Received to Finish in a timely fashion. Of course, all these things should be performed to ensure the accounts are providing a true reflection of the financial state at all times.
With that disclaimer in mind, cash flow analysis is an extremely useful tool in helping manage the company's cash requirements.
Further information