Cash Flow Statement Template for UK Businesses

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3 sectionsOperating, investing, and financing activities

Direct or indirectTwo accepted methods for operating cash flow

FRS 102 Section 7UK GAAP standard governing cash flow presentation

13-week rollingManagement cash flow horizon used by most lenders

Why the cash flow statement matters more than the P&L

A company can show a healthy profit on its P&L while simultaneously running out of cash — a situation common in businesses with long debtor payment cycles, rapid growth, or significant capital expenditure. The cash flow statement removes non-cash accounting adjustments (depreciation, accruals, provisions) and shows the actual cash generated or consumed in the period.

For commercial lenders assessing a facility application, the cash flow statement provides evidence that the business generates sufficient operating cash to service proposed debt repayments without relying on asset sales or further borrowing.

Structure of the three-section template

Operating activities: cash received from customers, cash paid to suppliers and employees, tax paid, interest paid — arriving at net cash from operations
Investing activities: purchase or sale of fixed assets, acquisitions, investments made or received, capital grants received
Financing activities: new borrowing drawn down, loan repayments made, equity raised, dividends paid to shareholders
Net movement in cash: the sum of all three sections, reconciled to opening and closing cash balances shown in the balance sheet

The 13-week rolling cash flow for lenders

For working capital facilities and invoice finance, most commercial lenders additionally require a 13-week rolling cash flow forecast — a week-by-week projection of receipts and payments over the next quarter. This format highlights short-term cash stress points that an annual or monthly statement would obscure.

A credible 13-week forecast shows opening cash, itemised expected receipts (identified by customer or invoice batch), itemised expected payments by category, and closing cash each week, alongside the available headroom against any overdraft or facility limit. Your finance director or accountant can help align forecast assumptions to actual trading data.

Frequently asked questions

What is the difference between the direct and indirect method?

The direct method lists actual cash receipts and payments line by line in the operating section. The indirect method starts with operating profit and adjusts for non-cash items (depreciation, changes in working capital) to arrive at net operating cash flow. Both produce the same result. The indirect method is more common in UK management accounts because the data is easier to extract from standard bookkeeping software.

Do small companies need to include a cash flow statement in statutory accounts?

Under FRS 102 Section 1A (applicable to small companies), a cash flow statement is not required in statutory accounts filed at Companies House. However, it remains best practice to include one in management accounts and any pack prepared for lenders or investors. Check with your accountant whether your company qualifies as small under the Companies Act thresholds.