Logics Cashflow and Account Type

Logics Cashflow and Account Type

Logics Cashflow and Account Type

1. Cash Flow Calculation on the Dashboard

The cash flow statement helps identify the sources and uses of cash in your business. Incoming cash typically arises from operating, investing, and financing activities, while outgoing cash represents expenses and payments made for business operations and investments. This information helps management make informed decisions about business operations.

In the dashboard:

·        
Incoming Cash: Calculated as the sum of debit entries from the following accounts:

·        
Bank Accounts

·        
Cash Accounts

·        
Payment Clearing Accounts

·        
Outgoing Cash: Calculated as the sum of credit entries from the same accounts:

·        
Bank Accounts

·        
Cash Accounts

·        
Payment Clearing Accounts

The closing cash balance is derived using the formula:

Cash as on Ending Date = (Cash as on Starting Date + Incoming) – Outgoing

 

If you would like to verify these numbers in detail, you can run the Account Transactions Report:

1.      
Go to Reports.

2.      
Open Account Transactions.

3.      
Click Customize Report.

4.      
Under Advanced Filters, select all Bank, Cash, and Payment Clearing accounts (including active and inactive accounts).

5.      
Choose the required date range (for example, “This Year”).

6.      
Run the report and review the sum of debit and credit values, which correspond to incoming and outgoing cash.

You may also refer to our help documentation for additional details.

 

2. Impact of Chart of Accounts (COA) Account Types

In Zoho Books, each account in the Chart of Accounts is assigned an Account Type (such as Asset, Liability, Income, Expense, or Equity). These account types determine:

·        
Where transactions appear in financial reports (e.g., Balance Sheet, Profit & Loss, Cash Flow Statement).

·        
How transactions are classified and grouped within reports.

·        
How balances contribute to financial summaries, such as assets contributing to the Balance Sheet or income accounts contributing to the Profit & Loss report.

For example:

·        
Income and Expense accounts affect the Profit & Loss report.

·        
Liability and Equity accounts are reflected in the Balance Sheet 

Proper classification of account types ensures that financial reports and dashboards accurately reflect the financial status of the organization. For more details about managing the Chart of Accounts, please refer to our help guide.