{"id":16429,"date":"2025-10-30T11:22:59","date_gmt":"2025-10-30T11:22:59","guid":{"rendered":"https:\/\/www.sage.com\/en-ie\/blog\/?p=16429"},"modified":"2025-10-30T11:23:00","modified_gmt":"2025-10-30T11:23:00","slug":"cash-flow-statement-explained","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ie\/blog\/cash-flow-statement-explained\/","title":{"rendered":"Cash flow statement explained"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tCash flow statement explained\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2025-10-30T11:22:59+00:00\">30 October, 2025<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Cash flow statement explained\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-ie\/blog\/cash-flow-statement-explained\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-ie\/blog\/author\/yassirmalik\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2024\/03\/Yassir-Malik.jpg\" class=\"entry-author__image\" alt=\"yassir-malik-profile-picture\" \/>\t\t\t\t<span class=\"entry-author__name\">Yassir Malik<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">A cash flow statement offers a definitive look at the financial health of a business to show how well it\u2019s performing during the current reporting period and over time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding the layout is not just important for anyone wanting to know more about the financial health of a company. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Being able to read a cash flow statement can also benefit any potential employees wanting to join a firm, or small businesses doing their own market research.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Cash is the lifeblood of a company, so the management team needs to monitor the cash flow at all times to ensure survival balanced with growth.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Financial statements are vital to inform decision-making for leadership, investors and creditors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This guide covers how to read a cash flow statement and how to prepare one.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To get a head start, you can also <a href=\"https:\/\/www.sage.com\/en-ie\/blog\/cash-flow-statement-template\/\" target=\"_blank\" rel=\"noreferrer noopener\">download our cash flow template<\/a>.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-here-s-what-we-ll-cover\">Here\u2019s what we\u2019ll cover<\/h4>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-a-cash-flow-statement\" data-level=\"2\">What is a cash flow statement?<\/a><\/li><li><a href=\"#h-what-is-a-cash-flow-statement-used-for\" data-level=\"2\">What is a cash flow statement used for?<\/a><\/li><li><a href=\"#h-what-does-a-cash-flow-statement-show-you-about-your-business\" data-level=\"2\">What does a cash flow statement show you about your business?<\/a><\/li><li><a href=\"#h-what-should-a-cash-flow-statement-include\" data-level=\"2\">What should a cash flow statement include?<\/a><\/li><li><a href=\"#h-the-3-main-activities-of-a-cash-flow-statement\" data-level=\"2\">The 3 main activities of a cash flow statement<\/a><\/li><li><a href=\"#h-what-are-cash-equivalents\" data-level=\"2\">What are cash equivalents?<\/a><\/li><li><a href=\"#h-how-to-read-a-cash-flow-statement\" data-level=\"2\">How to read a cash flow statement<\/a><\/li><li><a href=\"#h-cash-flow-statement-vs-income-statement-vs-balance-sheet\" data-level=\"2\">Cash flow statement vs. income statement vs. balance sheet<\/a><\/li><li><a href=\"#h-the-differences-between-uk-gaap-and-ifrs\" data-level=\"2\">The differences between UK GAAP and IFRS<\/a><\/li><li><a href=\"#h-cash-flow-statement-example\" data-level=\"2\">Cash flow statement example<\/a><\/li><\/ul><\/div>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Cash flow statement template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download our cash flow statement Excel templates<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-da3db01f-0c9a-48de-8f77-5ee26ea70191\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"577\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Cash-flow-template-image-577x810.jpg\" class=\"single-cta__image\" alt=\"An example of a cash flow statement.\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Cash-flow-template-image-577x810.jpg 577w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-cash-flow-statement\">What is a cash flow statement?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A cash flow statement is a simple report that discloses your business\u2019s cash outflows and inflows during a reporting period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It shows how the business received and spent cash, providing a complete picture of what occurred with the business\u2019s cash during the time frame in question. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It also confirms whether the organisation can pay its expenses and debts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Also known as a statement of cash flows, this document is part of a set of required primary statements, along with the balance sheet and income statement. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We\u2019ll compare these three reports in depth below, but essentially:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Cash flow statements<\/strong> show how much cash is in hand, and how the business uses its cash<\/li>\n\n\n\n<li><strong>Balance sheets<\/strong> show the business\u2019s assets, liabilities, and equity<\/li>\n\n\n\n<li><strong>Income statements<\/strong> show the business\u2019s profitability<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">All cash flow statements use standardised formats and formulas.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Irish companies using FRS 102 (the Financial Reporting Standard applicable in the Republic of Ireland and the UK) follow <a href=\"https:\/\/www.frc.org.uk\/library\/standards-codes-policy\/accounting-and-reporting\/uk-accounting-standards\/frs-102\/\" target=\"_blank\" rel=\"noreferrer noopener\">FRS 102 Section 7<\/a> as a guide for developing cash flow statements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Organisations using IFRS (International Financial Reporting Standards) follow <a href=\"https:\/\/www.ifrs.org\/issued-standards\/list-of-standards\/ias-7-statement-of-cash-flows\/\" target=\"_blank\" rel=\"noreferrer noopener\">IAS 7<\/a> (International Accounting Standard 7: Statement of Cash Flows) when creating this report.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although these two sets of guidelines are similar, they differ in how they classify various reporting activities. We\u2019ll detail the differences below.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-cash-flow-statement-used-for\">What is a cash flow statement used for?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This financial statement serves several purposes for internal and external decision makers:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Creditors<\/strong> may use it to assess the organisation\u2019s liquidity (e.g. the amount of cash on hand)<\/li>\n\n\n\n<li><strong>Investors<\/strong> may use it to measure the company\u2019s financial health and inform their valuation<\/li>\n\n\n\n<li><strong>Shareholders<\/strong> may use it to monitor the strength of their investments over time<\/li>\n\n\n\n<li><strong>Stakeholders<\/strong> may review cash flow to assess financial stability.<\/li>\n\n\n\n<li><strong>Accounting staff<\/strong> may use it to confirm whether the company can successfully process payroll<\/li>\n\n\n\n<li><strong>Market research<\/strong> may use it to assess the state of the market and the performance of their direct or indirect competitors.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Because cash flow statements follow accounting standards, they can also be used as comparative tools.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In other words, you can use them to compare the performance and efficiency of two or more companies. You can also use them to compare a single company\u2019s performance over multiple reporting periods.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Companies may produce cash flow statements monthly, quarterly, or annually. This is why accurate general ledger reconciliation is so important.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Ireland, financial reporting obligations are governed by the Companies Act 2014, which outlines exemptions for small and micro companies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-a-cash-flow-statement-show-you-about-your-business\">What does a cash flow statement show you about your business?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A statement of cash flow answers many important questions about the health of your business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How liquid is your business?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This statement tells you exactly how much cash your business has on hand at the end of the reporting period. It confirms if you can pay debts and operating expenses in cash.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What are your biggest sources of cash inflow and outflow?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The simplicity of this report makes it easy to see which activities contribute most to your business\u2019s income and expenses.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How is your cash flow likely to look in the future?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You can compare multiple consecutive statements to identify patterns, anticipate future cash flow, and make data-driven decisions about business plans.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Is your business likely to receive financing?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Investors and lenders often review cash flow to make decisions about providing loans, lines of credit, and funding.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-should-a-cash-flow-statement-include\">What should a cash flow statement include?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Cash flow statements follow a structure that lists the business\u2019s operating, investing, and financing activities. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Each activity type appears in a dedicated section. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This way, it\u2019s easy to see which has the biggest impact on the business\u2019s cash flow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After listing the business\u2019s activities, the statement shows the total increase or decrease in cash and cash equivalents. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A positive number reflects a net increase, while a negative number reflects a net decrease.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The statement also includes the opening balance of cash and cash equivalents for the reporting period. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This figure equals the closing cash balance for the previous period and can be placed either at the top of the statement or at the end with the closing balance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the end of the statement is the closing balance of cash and cash equivalents for the current reporting period. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This closing balance figure will become the opening balance for the subsequent reporting period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Cash flow statements also disclose non-operating non-cash activities, an example of this is renegotiating debt as a debt\/equity swap.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the accounting standard the organisation uses determines where this disclosure appears.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">IFRS places non-operating non-cash investing activities in a footnote. UK GAAP allows these disclosures to appear either on the statement or a footnote.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Cash flow statement template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download our cash flow statement Excel templates<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-da3db01f-0c9a-48de-8f77-5ee26ea70191\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"577\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Cash-flow-template-image-577x810.jpg\" class=\"single-cta__image\" alt=\"An example of a cash flow statement.\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Cash-flow-template-image-577x810.jpg 577w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-3-main-activities-of-a-cash-flow-statement\">The 3 main activities of a cash flow statement<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Every cash flow statement includes three main sections. Each details a specific type of cash inflow or outflow.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-operating-activities\">Operating activities<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Operating activities refer to standard business activities. This section of the statement shows how much cash the company\u2019s offerings (e.g., products or services) generate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Cash from operating activities includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Selling goods or services<\/li>\n\n\n\n<li>Paying suppliers and vendors<\/li>\n\n\n\n<li>Making interest or income tax payments<\/li>\n\n\n\n<li>Paying wages or salaries to employees<\/li>\n\n\n\n<li>Making rent payments for company facilities<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-investing-activities\">Investing activities<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Investing activities refer to the acquisition and disposal of long-term assets and other investments not included in cash equivalents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This section of the statement shows how much cash the company generates from buying or selling investments or assets.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Cash flow from investing activities includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Buying or selling assets (e.g., real estate and equipment)<\/li>\n\n\n\n<li>Issuing to and collecting loans from subsidiaries of the company<\/li>\n\n\n\n<li>Purchasing intangible assets such as patents or intellectual property rights<\/li>\n\n\n\n<li>Engaging in mergers and acquisitions<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For investment companies, investing is part of doing business. In this case, any cash paid or owed for investments appears in the operating activities section.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-financing-activities\">Financing activities<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Financing activities refer to investments other organisations have made in the company. This section of the cash flow statement shows how much cash the company generates from raising funds and repaying debt.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Cash flow from financing activities includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Financing from loans or investors<\/li>\n\n\n\n<li>Repaying debt principal<\/li>\n\n\n\n<li>Making payments to shareholders<\/li>\n\n\n\n<li>Issuing stock<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-cash-equivalents\">What are cash equivalents?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A cash flow statement includes both cash and cash equivalents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Cash equivalents are short-term investments that are highly liquid. To fit this definition, they must be easy to convert to cash or so close to maturity that the risk of valuation changes are low.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some examples of cash equivalents include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Currency<\/li>\n\n\n\n<li>Bank accounts<\/li>\n\n\n\n<li>Treasury bills<\/li>\n\n\n\n<li>Short-term government bonds<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Opening and closing balances include both cash and cash equivalents.<\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a67ce329b2cd&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"6a67ce329b2cd\" class=\"wp-block-image size-full wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1425\" height=\"710\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on--pointerdown=\"actions.preloadImage\" data-wp-on--pointerenter=\"actions.preloadImageWithDelay\" data-wp-on--pointerleave=\"actions.cancelPreload\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Image-2.jpg\" alt=\"Illustration of a person using a vintage cash register with text explaining cash equivalents as highly liquid, low-risk short-term investments\u2014key elements when having the cash flow statement explained, including currency, bank accounts, and treasury bills.\" class=\"wp-image-16443\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Image-2.jpg 1425w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Image-2-768x383.jpg 768w\" sizes=\"auto, (max-width: 1425px) 100vw, 1425px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\tdata-wp-bind--aria-label=\"state.thisImage.triggerButtonAriaLabel\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.thisImage.buttonRight\"\n\t\t\tdata-wp-style--top=\"state.thisImage.buttonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">There are two ways to calculate cash flow from operating activities. Both GAAP and IFRS accept either preparation method, but IFRS prefers the direct method.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-direct-method\">Direct method<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The direct method is straightforward and often preferred under IFRS. It can be used with both cash and accrual accounting methods.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This method is essentially a tally of cash collected minus cash disbursed. To use this method, simply list out and add up all cash payments and receipts from the reporting period.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-indirect-method\">Indirect method<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The indirect method is a little more complex than the direct method. However, companies using the accrual basis accounting method may find it to be less time-intensive.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is because the indirect method uses the company\u2019s income statement as the starting point for calculating cash flow. The income statement counts income and expenses when they\u2019re accrued.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To use this method, start with the net income. Then, adjust it by adding or subtracting all non-cash items.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Asset depreciation and amortisation are some of the most common adjustments. Both of these items decrease income, but they aren\u2019t cash expenses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An<a href=\"https:\/\/www.ifrs.org\/news-and-events\/news\/2024\/04\/new-ifrs-accounting-standard-will-aid-investor-analysis-of-companies-financial-performance\/\" target=\"_blank\" rel=\"noreferrer noopener\"> April 2024 amendment to IFRS<\/a> introduces a requirement to use the operating profit subtotal as the starting point for the indirect method. This change affects annual periods starting on or after <strong>January 1, 2027<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-read-a-cash-flow-statement\">How to read a cash flow statement<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">On reading this statement, finance professionals typically draw one of two conclusions. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The organisation has either a positive or negative cash flow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The cash flow statement reflects the organisation\u2019s cash inflows and outflows over a reporting period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Compare multiple statements to gain a more complete picture of the organisation\u2019s financial health over time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A comparison shows if the business is growing, going through a period of decline, or transitioning between these two states. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It also reveals if the business is on a path to bankruptcy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-negative-cash-flow\">Negative cash flow<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A statement showing negative cash flow indicates the business is spending more cash than it\u2019s receiving. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although this outcome may seem undesirable, it doesn\u2019t always signal a serious problem.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The business\u2019s growth or funding stage may negatively affect cash flow for a limited time. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While cash flow may be negative during this period, ideally, the trend will reverse.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As an example, additional context or deeper analysis may reveal that the business is undergoing rapid growth or expansion. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In addition, early-stage startups often have a higher burn rate before becoming profitable.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-positive-cash-flow\">Positive cash flow<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A statement showing positive cash flow indicates the business is bringing in more cash than it\u2019s paying out. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On a surface level, more cash flowing in than out reflects a financially healthy business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, positive cash flow doesn\u2019t always equal a profitable business. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a result, it\u2019s essential to review the company\u2019s income statement and balance sheet to analyse the underlying factors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As an example, a business can achieve a positive cash position by taking out a large loan to mitigate cash flow problems.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This position may be temporary\u2014and it may reverse once the repayment period begins.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some fluctuation is inevitable. But businesses with uneven cash flow over multiple reporting periods often appear unstable. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Investors may view their risk level as too high and decline to fund them.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-cash-flow-statement-vs-income-statement-vs-balance-sheet\">Cash flow statement vs. income statement vs. balance sheet<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">As useful as cash flow statements are, they tell only part of the story of a company\u2019s financial health. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That\u2019s why it\u2019s helpful to review them alongside two other financial statements: balance sheet and income statement.<\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a67ce329d4c9&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"6a67ce329d4c9\" class=\"wp-block-image size-full wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1441\" height=\"776\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on--pointerdown=\"actions.preloadImage\" data-wp-on--pointerenter=\"actions.preloadImageWithDelay\" data-wp-on--pointerleave=\"actions.cancelPreload\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Image-3.jpg\" alt=\"An infographic with green, grey, and black sections uses icons and descriptions to make financial statements clear, including a section where the cash flow statement is explained alongside balance sheets and profit and loss accounts.\" class=\"wp-image-16445\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Image-3.jpg 1441w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2025\/07\/Image-3-768x414.jpg 768w\" sizes=\"auto, (max-width: 1441px) 100vw, 1441px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\tdata-wp-bind--aria-label=\"state.thisImage.triggerButtonAriaLabel\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.thisImage.buttonRight\"\n\t\t\tdata-wp-style--top=\"state.thisImage.buttonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-cash-flow-statement\">Cash flow statement<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This statement reflects the reality of the company\u2019s cash position at the end of the reporting period. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It details what happened to the cash and if the company has enough on hand to operate effectively.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It only includes cash inflows and outflows that have already occurred. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A cash flow statement doesn\u2019t include credit-based sales or other income or expenses that haven\u2019t yet flowed into or out of the business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a result, income statements and cash flow statements can show seemingly contradictory results. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An income statement may show a profit if the business has incurred substantial income, while a cash flow statement may show negative cash flow if the business has spent more cash than it received.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-income-profit-and-loss-statement\">Income\/profit and loss statement<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">An income statement serves as the starting point for the indirect method of calculating cash flow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Also called a profit and loss (P&amp;L) statement, it reflects the company\u2019s net income at the end of the reporting period. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It shows the cumulative effect of all revenue and expenses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It includes several components that don\u2019t factor into cash flow, such as credit-based sales and depreciation. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Neither of these line items reflect cash flowing into or out of the business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That\u2019s because the accrual method that most businesses use to record income when it\u2019s earned and expenses when they\u2019re incurred. Often, this timing doesn\u2019t align with when the cash arrives or leaves the account.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-balance-sheet\">Balance sheet<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A balance sheet reflects the company\u2019s current resources and their worth. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Think of a balance sheet as a report that calculates the company\u2019s value.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It reveals the company\u2019s available resources, including assets, liabilities, and owner equity. In other words, it tallies how much the company owns and how much it owes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This report doesn\u2019t include revenue, expenses, or cash inflow and outflow.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-differences-between-uk-gaap-and-ifrs\"><strong>The differences between UK GAAP and IFRS<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">UK GAAP (FRS 102 Section 7) and IFRS (IAS 7) accounting standards both require cash flow statements as part of the financial reporting process. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And both use similar rules to prepare these statements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the two standards have important differences. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Namely, IFRS classifies cash flow based on the nature of the activity. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If using the indirect method, GAAP looks at the income statement for net income and non-cash expenses like depreciation and amortisation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here are some ways cash flow statements reflect these differences:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Cash equivalents:<\/strong> IAS 7 includes both cash and cash equivalents. FRS 102 Section 7 requires the disclosure of cash, cash equivalents, or restricted cash on the cash flow statement to be the same as how those items are presented on the balance sheet.&nbsp;<\/li>\n\n\n\n<li><strong>Interest and dividend payments:<\/strong> IAS 7 permits interest and dividends paid to be part of either operating or financing activities. FRS 102 requires consistency with how these are presented on the balance sheet, and IAS 7 allows flexibility (until 2027).<\/li>\n\n\n\n<li><strong>Interest and dividend receipts:<\/strong> IAS 7 allows interest and dividends received to be classified as operating, or investing activities. The classification must remain consistent between reporting periods.<\/li>\n\n\n\n<li><strong>Bank borrowings:<\/strong> In Ireland, overdrafts are commonly treated as financing activities unless they form an integral part of cash management.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s important to note that an April 2024 amendment to IAS 7 removes presentation alternatives for dividends and interest. This change applies to annual periods starting on or after January 1, 2027.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Both IFRS and GAAP allow either the direct or indirect method of calculating cash flow. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">FRS 102 (UK\/ROI GAAP) encourages the indirect method, while US GAAP typically defaults to it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-cash-flow-statement-example\">Cash flow statement example<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This example illustrates how a typical cash flow statement looks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can download a <a href=\"https:\/\/www.sage.com\/en-ie\/blog\/cash-flow-statement-template\/\" target=\"_blank\" rel=\"noreferrer noopener\">cash flow statement template here<\/a>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\">To help you prepare your financial statements, <a href=\"https:\/\/www.sage.com\/en-ie\/sage-business-cloud\/intacct\/\" target=\"_blank\" rel=\"noreferrer noopener\">Sage Intacct<\/a> has 150 financial reports that allow easy access to your financial information.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With Sage <a href=\"https:\/\/www.sage.com\/en-ie\/accounting-software\/financial-reporting\/\" target=\"_blank\" rel=\"noreferrer noopener\">financial reporting software<\/a> you can create custom reports to help with your reporting, leaving you more time to focus on the management and growth of your business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can also have a real-time visibility into your financial data through Sage <a href=\"https:\/\/www.sage.com\/en-ie\/accounting-software\/cash-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">cash management software<\/a>, which help you create accurate forecasts and build financial plans confidently.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Join 1.5 million subscribers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-53abbdcc-410c-4c8c-bf97-ca5c6982eebd\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"999\" height=\"666\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/z.5E3A0481_All-Uses.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/z.5E3A0481_All-Uses.jpg 999w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n<section class=\"more-topics alignfull has-grey-light-background-color wp-block-sage-post-topics\">\n\t<div class=\"container\">\n\t\t<div class=\"row\">\n\t\t\t<div class=\"col col-12 col-lg-4\">\n\t\t\t\t<h3 class=\"more-topics__title h2\">Browse more topics from this article<\/h3>\n\t\t\t<\/div>\n\t\t\t<div class=\"col col-12 col-lg-8\">\n\t\t\t\t<ul class=\"post-tags__list\">\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/tag\/accounting-102\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\taccounting 102\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/tag\/business-finances\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tBusiness finances\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/tag\/business-intelligence\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tbusiness intelligence\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/tag\/cash-flow\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tCash flow\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/tag\/grow-accounting-practice\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tHow to grow your accounting practice\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/tag\/grow-business\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tHow to grow your business\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/tag\/trending-news\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\ttrending news\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/section>\n\n<div class=\"alignfull wp-block-sage-related-posts\">\n\t<section class=\"related-posts card-grid has-dark-background-color\">\n\t<div class=\"container\">\n\t\t\t\t\t<div class=\"row\">\n\t\t\t\t<div class=\"col\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--featured h1\">Explore more wisdom<\/h2>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t\t\t<div class=\"row related-posts__featured\">\n\t\t\t\t<div class=\"col card-grid__item\">\n\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-0 post-18286 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-people-leadership tag-business-costs tag-business-management tag-grow-business tag-recruit tag-hr-process tag-looking-after-your-employees tag-payroll business_type-small-business business_type-medium-sized-business card-post--is-clickable\"\n>\n\t<div class=\"card-post__media-wrapper\">\n\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2024\/04\/GettyImages-1035512574-1-1440x810.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2024\/04\/GettyImages-1035512574-1-684x384.jpg 684w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2024\/04\/GettyImages-1035512574-1-768x432.jpg 768w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2024\/04\/GettyImages-1035512574-1-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\t<\/div>\n\n\t<div class=\"card-post__content\">\n\t\t\t\t\t<div class=\"card-post__label\">Recommended<\/div>\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-07-09T15:55:14+01:00\">9 July, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">8 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h3\">\n\t\t\t\t\t\t\t<a\n\t\t\t\t\tclass=\"card-post__title-link\"\n\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-ie\/blog\/minimum-wage-ireland\/\"\n\t\t\t\t>\n\t\t\t\n\t\t\tMinimum wage Ireland 2026: the real impact on your margins\n\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/p>\n\n\t\t\n\t\t\t\t\t<p class=\"card-post__description\">\n\t\t\t\tThe minimum wage in Ireland is \u20ac14.15 in 2026. Learn how higher wages, employer PRSI and pay differentials could affect your business costs.\t\t\t<\/p>\n\t\t\n\t\t\t<\/div>\n\n\t<\/article>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t\t\t\t<div class=\"row related-posts__non-featured\">\n\t\t\t\t<div class=\"col col-12\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--more h4\">More on this Topic<\/h2>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-1 post-18026 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-strategy-legal-operations tag-accounting-102 tag-business-intelligence tag-business-planning tag-cash-flow tag-compliance tag-profit-loss tag-tax tag-vat business_type-small-business business_type-medium-sized-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ie\/blog\/vat-rates-in-ireland\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2023\/10\/GettyImages-1254783885-1-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2023\/10\/GettyImages-1254783885-1-684x384.jpg 684w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2023\/10\/GettyImages-1254783885-1-768x432.jpg 768w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2023\/10\/GettyImages-1254783885-1-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-26T12:03:32+01:00\">26 June, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">6 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tVAT rates in Ireland 2026: who qualifies for the 9% rate?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-2 post-17991 post type-post status-publish format-standard has-post-thumbnail hentry category-people-leadership category-trends-insights tag-ai tag-automation tag-business-intelligence tag-hr-process tag-hr-processes-medium-businesses business_type-small-business business_type-medium-sized-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ie\/blog\/what-is-ai-in-hr\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2026\/06\/Ai-in-HR-infographic-image-684x384.jpg\" class=\"card-post__image\" alt=\"A woman stands in front of the Sage glowline in front of a black background.\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2026\/06\/Ai-in-HR-infographic-image-684x384.jpg 684w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2026\/06\/Ai-in-HR-infographic-image-768x432.jpg 768w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2026\/06\/Ai-in-HR-infographic-image-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-19T16:33:22+01:00\">19 June, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">10 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat is AI in HR and how can you use it responsibly?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-3 post-17859 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-strategy-legal-operations tag-accounting-102 tag-audit tag-bookkeeping tag-business-management tag-financial-decisions tag-profit-loss business_type-small-business business_type-medium-sized-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ie\/blog\/three-way-matching-in-accounts-payable\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/Sage_Cantelowes1444_All-Uses-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/Sage_Cantelowes1444_All-Uses-684x384.jpg 684w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/Sage_Cantelowes1444_All-Uses-768x512.jpg 768w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/Sage_Cantelowes1444_All-Uses.jpg 999w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-04-13T11:11:45+01:00\">13 April, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">11 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tThree-way matching in accounts payable: What it is and why it matters\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-4 post-17849 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters tag-bookkeeping tag-cash-flow business_type-small-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ie\/blog\/what-is-a-pro-forma-invoice\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2022\/04\/GettyImages-1171809453-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2022\/04\/GettyImages-1171809453-684x384.jpg 684w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2022\/04\/GettyImages-1171809453-768x432.jpg 768w, https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2022\/04\/GettyImages-1171809453-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-04-10T12:10:49+01:00\">10 April, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">7 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat is a pro forma invoice?\u00a0\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>A cash flow statement can explain a lot about your business. This guide outlines how to read the statement, what it should cover, and preparation methods.<\/p>\n","protected":false},"author":1774,"featured_media":7552,"menu_order":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[163,165],"tags":[253,107,258,110,129,130,304],"business_type":[5,2],"lilypad":[],"context":[],"industry":[],"persona":[176,251,232],"imagine_tag":[177,178,215,230,323,234],"coauthors":[385],"class_list":["post-16429","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","category-strategy-legal-operations","tag-accounting-102","tag-business-finances","tag-business-intelligence","tag-cash-flow","tag-grow-accounting-practice","tag-grow-business","tag-trending-news","business_type-small-business","business_type-accountants"],"sage_meta":{"region":"en-ie","author_name":"Yassir Malik","featured_image":"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/206250_25480_1200x600.jpg","imagine_tags":{"177":"Accountants","178":"Accounting software","215":"News","230":"Small business","323":"Small business continuity","234":"Start-up business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Ireland","distributor_original_site_url":"https:\/\/www.sage.com\/en-ie\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts\/16429","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/users\/1774"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/comments?post=16429"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts\/16429\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/media\/7552"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/media?parent=16429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/categories?post=16429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/tags?post=16429"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/business_type?post=16429"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/lilypad?post=16429"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/context?post=16429"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/industry?post=16429"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/persona?post=16429"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/imagine_tag?post=16429"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/coauthors?post=16429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}