A cash flow statement tracks the cash that goes in and out of a business during a specific period of time (e.g., a month, quarter, or year). For property owners, it helps measure how well their rental business is able to generate cash to cover debts and expenses. Cash flow statements help owners make informed decisions about their businesses. Cash flow differs from your P&L by (1) adjusting your net income for any non-cash income or expenses and (2) including cash flows from non-operating activities (e.g., loans, cap-ex). The two biggest sources of difference between the P&L and cash for rental property owners are (1) depreciation (a non-cash expense) and (2) mortgage principal repayment (a cash outflow that doesn’t hit your P&L).
How can I generate a cash flow statement in Azibo?
Azibo enables rental property owners to create a complete, up-to-date Statement of Cash Flows for individual properties, portfolios, or all properties over a specific time period. Simply follow these steps:
- Import all rental business transactions automatically by linking the relevant bank or credit card accounts. Transactions can also be manually recorded in the same tool.
- Use our bookkeeping tool to assign each transaction to a property and category from our Chart of Accounts. Watch demo below for more info.
- Go to Reports and click Cash Flow Statement. Select the properties and the time period for the report to see the live results.
- Note - in order to generate a cash flow statement for a property or including a specific property, you must have initialized a balance sheet for that specific property.
What is included in Azibo’s Statement of Cash Flows?
| Section | Definition |
| Pre Tax Net Income | The cash flow report starts with the pre tax net income from the P&L |
| Operating Cash Flows | This section adjusts Pre Tax Net Income to Net Cash provided by Operations. It does that by adjusting for non cash expenses (e.g., depreciation/amortization), adjusting for expenses put on credit cards, and adjusting for sources or uses of cash from balance sheet items such as deposits. |
| Investing Cash Flows | This section details out increases or decreases in cash due to investments or sales of fixed assets (land, buildings, capital expenditures) and from other assets. If you spend $10,000 on a new HVAC system, for example, you’ll see that impact to cash flow here. |
| Financing Cash Flows | This section details out increases or decreases in cash due to financing activities such as loans or owner’s contributions/distributions. This is where you’ll find changes in cash due to mortgage principal paydown, and due to any distributions you take for yourself from the business. |
| Total Cash Flows | This line sums up all of the above subtotals, showing you your total cash flow for that period. |
| Cash Accounts | This section shows you the starting and ending balances of your cash accounts, along with the total change in your cash accounts. This section reconciles to the total cash flow line. |
Would you like to learn more about Statement of Cash Flows and how it applies to your real estate business? Click here to read more.