Nonprofit Cash Flow Statement: Insights Every Leader Needs

Running a nonprofit is about more than just heart—it takes careful planning and wise financial decisions to keep things running smoothly. Every dollar that comes in and goes out has a role in fulfilling your mission. That’s where your cash flow statement comes in.

Think of it as a health check for your organization’s finances. It shows where your money comes from, your spending, and whether you have enough to cover what’s next. Tools like Sage Intacct simplify managing cash flow by helping you track, organize, and analyze your financial activity—all in one place.

Sage Intacct is a user-friendly platform that doesn’t require extensive financial expertise, making it accessible to nonprofit leaders and financial managers. Later in this article, you’ll learn exactly how Sage Intacct does that. First…

What Is Cash Flow?

The inflow and outflow of funds within your organization is known as Cash flow. It’s how you know whether there’s enough cash in the bank to pay the bills, support your programs, or respond to unexpected needs.

Is cash flow the same as profit? Not exactly. Profit shows whether you bring in more money than you’re spending, but cash flow tells you whether you have that money when needed. For example, in papers, you might be showing a profit, but if there are delays in donations or grants that have yet to come through, you could struggle to meet daily expenses.

What can cash flow tell you? Cash flow reveals your organization’s financial health. It helps you spot trends, like seasonal dips in income or when expenses tend to spike so that you can plan. Managing cash flow well means you’re prepared to handle challenges and can make confident decisions about growth opportunities.

What Is a Nonprofit Cash Flow Statement?

A cash flow statement breaks down your nonprofit’s financial activity over a specific period. It answers three key questions:

1. Where is your money coming from?
2. Where is it going?
3. Do you have enough to cover your needs?

Do nonprofits have statements of cash flows? Absolutely. Cash flow statements are significant for nonprofits because they often deal with restricted funds. These are donations or grants designated for specific purposes, and careful tracking is crucial to maintaining trust and compliance.

This report doesn’t just keep you organized—it helps you stay accountable to your board, donors, and the communities you serve.

Key Components of a Nonprofit Cash Flow Statement

A nonprofit cash flow statement has three main sections:

1. Operating Activities:
   • Money coming in: Donations, grants, program fees.
   • Money going out: Payroll, operational costs, utilities.
2. Investing Activities:
   • Buying or selling equipment or property.
   • Adding to or withdrawing from endowment funds.
3. Financing Activities:
   • Loans or credit.
   • Restricted fund receipts or disbursements.

These sections work together to give a complete picture of your financial activity. With tools like Sage Intacct, you can organize these categories effortlessly, ensuring your reports are clear and accurate every time.

Why Nonprofits Need Cash Flow Statements

Do you need nonprofit cash flow statements? Without question. It’s not just a report—it’s your financial story. Understanding and mastering this story empowers you, giving you a sense of control and confidence in your financial decisions.

Your cash flow statement complements key reports like the balance sheet, income statement, and functional expense report. The balance sheet previews your organization’s financial position at a specific time; the income statement shows your financial performance over a period, and the functional expense report details how your funds are allocated to different programs and activities. Together, these give a complete view of your nonprofit’s financial position.

Here’s why cash flow statements are so essential:

• They assist you in making well-informed choices regarding the allocation of resources.
• They provide transparency to donors and board members.
• They ensure compliance with grant and donor requirements.

A well-maintained cash flow statement is non-negotiable to build trust and operate smoothly.

How to Prepare a Nonprofit Cash Flow Statement with Sage Intacct

Creating a cash flow statement can be manageable. Here’s how to do it:

1. Gather Your Data:
2. Start with your financial activity—operating, investing, and financing. Include all inflows (like donations or grants) and outflows (like rent or payroll).
3. Categorize Transactions:
4. Break your cash movements into three main categories. Make sure to track restricted and unrestricted funds separately.
5. Use Sage Intacct:
6. Sage Intacct takes the guesswork out of reporting. You can tag transactions by grant, program, or department, ensuring that your reports are clear, detailed, and most importantly, accurate. This level of precision provides reassurance and security in your financial management.

Tips for Success:

• Update your data regularly to avoid surprises.
• Double-check restricted fund entries for accuracy.
• Monitor your cash flow monthly to catch issues early.

With Sage Intacct, you’ll spend less time crunching numbers and focusing more on your mission.

Take Control of Your Nonprofit’s Finances

Cash flow management isn’t just about numbers—it’s about ensuring your nonprofit can continue to make a difference. A clear and accurate cash flow statement gives you the insight to plan effectively, fulfill obligations, and sustain your mission over the long term.

If you’re ready to simplify your financial management, JFW Accounting Services can help. Our team specializes in tools like Sage Intacct that make reporting seamless and stress-free. 

Contact us today or schedule a demo to see how we can support your nonprofit’s success.