Products

Business Account

One account for all your business financial needs

Virtual Cards

The smartest corporate card for digital SMEs and Startups

Credit Solutions

A line of credit built to scale 10-20x with your working capital needs

Features

Borderless payments

Multi-User Access

Expense Management

Invoice Management coming soon

Cashback

Rewards

Integrations

PricingIncorporation
Company

About us

Partner with us

Help

Contact us

FAQs

LoginOpen Account
Blog
Product Updates
Case Studies
Corporate Card
Business Accounts
Incorporation
SME Loan
Cash Management
Marketing Tips
News & Press
Business Guides

Example of a Cash Flow Statement for Startup Business

October 8, 2020
5 mins read
Example of a Cash Flow Statement for Startup Business

The Cash flow statement is a compulsory document to file with the Accounting and Corporate Regulatory Authority (ACRA). However, it serves a purpose way beyond regulatory requirements.


As we serve startups across Southeast Asia, we observe cash flow problems to be a recurring issue for young and budding companies. In fact, liquidity and cash flow issues have been highlighted as one of the main reasons why startups fail.


Components of A Cash Flow Statement

In compliance with Singapore Financial Reporting Standards (see “archived documents”), the mandatory items of a cash flow statement are as follows.


1. Operating Activities

Operating activities take into consideration cash obtained or used from your startup’s operational transactions. This portion of the cash flow statement allows you to identify sustainable cash inflows, management of working capital, and early detection of liquidity issues.


2. Investing Activities

Investing activities indicate cash flow from acquisition and disposal of assets and investments. This section highlights lucrative investments and flags less profitable ones that produce non-recurring returns.


3. Financing Activities

Financing activities take into consideration cash movement from changes in liabilities and shareholder’s equity. This portion highlights cash flow from financing activities such as term loans and the purchase of shares.


4. Net Cash Flow

Also known as net working capital, this is the difference between your startup’s cash inflows and outflows. A positive cash flow indicates that a company’s current assets are sufficient to fund its current liabilities.


Conversely, a negative cash flow indicates that your current liabilities are higher than your current assets. In the short-term, a negative cash flow is fine as it could mean that you just bought a large amount of assets.


However, if your startup business is facing a negative cash flow for extended periods, this could potentially be a problem.


Cash Flow Statement Example

Cash Flow Statement Example from ACRA


Constructing the Statement of Cash Flows from scratch can be an uphill and intimidating task for startups that are new to this. Fret not, for we have got you covered with this sample of a cash flow statement by ACRA.


Use this sample statement by adding or removing the items that are relevant to your business.



Managing Startup Working Capital

As illustrated in the sample cash flow statement, the sources of working capital can be condensed into 4 “C”s

  • Collection of payment from customers
  • Credit terms paid to suppliers
  • Credit facilities
  • Cash on hand


With these in mind, your startup can look to generate healthy cash flow through the following methods.


1. Collect receivables before payable due dates

Collecting payment from customers before financial obligations are due ensures that your startup has sufficient funds to pay your suppliers.

This can be done by shortening the payment term for customers or giving them discounts for making early payment.


In addition, negotiating for a longer credit term with your suppliers also gives your startup more time to gather cash inflows from customers.


2. Reduce inventory

In monitoring your startup’s inventory levels, sieve out slower-moving products. You should buy or produce less products that accumulate huge amounts of stock.


This frees up cash that was once tied to inventory, enabling your startup to channel these funds towards timely payments. This cash can be spent on meaningful marketing strategies that increase sales for potential business expansion.


3. Make investments

A high net working capital does not equate to a healthy cash flow. A large cash flow can mean that your startup is not fully utilising its available cash to maximise growth.


Instead of leaving cash on the table, seek out money-making investments or new growth opportunities such as expanding your business product line or entering a new market.


Conclusion

The cash flow statement continues to be a highly important financial statement for your business - for legal requirements and measuring your business' health.


A healthy cash flow is key for a startup to thrive and can be managed through analysing various aspects of the cash flow statement.


Moreover, with COVID-19 and the recession in place, this statement plays an even essential role in ensuring your business' sustainability to make it past these difficult times. Therefore, you must ensure that your cash flows are managed efficiently and adequately.

Want more expert tips on managing your business better?

Subscribe for our newsletter and stay in the know
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Related posts

January 12, 2021
•
10 mins read

20 Best Accounting Software Tools for Businesses in Singapore (2021 Edition)

January 14, 2021
•
8 mins read

10 Tips to Simplify Bookkeeping for New Businesses

Cash Management

supported by

Business banking doesn't have to be hard. At Aspire, we've made it easy, fast, and transparent. So you can focus on what matters — growing your business.
Rated on

4.9

/5

STAY IN THE KNOW

Thank you! Your submission has been received!
Oops! Something went wrong, please try again.

Products

Business AccountCorporate CardFX International TransferCredit Line

Features

Multi-User AccessExpense ManagementRewardsCashbackIntegrations

Platform

FAQsPricingBusiness accounts comparisonTerms of useAcceptable use policyComplaints policyPrivacy policy

Company

About usContact usBlogCareersNews & pressPartner with us

Kickstart

Incorporate your companyAdvisory Marketplace
Consumer advisory - Aspire FT Pte. Ltd. is currently exempted from holding a licence to provide payment services under the Payment Services Act (No. 2 of 2019). You can find the list of exempted entities here. Credit lines to businesses are issued by Aspire Financial Technologies Pte. Ltd, which is an exempted moneylender under the Moneylenders Act (Cap. 188). Visa cards are issued and powered by NIUM Pte Ltd. Consumers and cardholders are advised to read all terms and conditions which can be found here.
If you wish to discuss data protection matters, please contact our Data Protection Officer at singapore-dpo@aspireapp.com