Cash Flow Statement Configuration on Odoo

A cash flow statement (CFS) is a financial statement that provides a summary of the cash inflows and outflows of an organization during a specific period. It's an essential tool for assessing the financial health of a business and understanding how cash is being generated and used. The CFS is typically divided into three main sections: 

  1. Operating Activities:
  • This section includes cash flows related to the organization's core business operations. It shows how much cash is generated or used by selling goods or services, collecting accounts receivable, and paying operating expenses.
  • Cash inflows from operating activities may include sales revenue, interest income, and cash received from customers.
  • Cash outflows may include payments to suppliers, employee salaries, rent, utilities, and other day-to-day expenses.

Investing Activities:

  • This section includes cash flows related to the purchase and sale of long-term assets or investments. It shows how much cash is invested in or received from activities like acquiring or selling property, plant, equipment, or investments in other companies.
  • Cash inflows from investing activities may include proceeds from the sale of assets or investments.
  • Cash outflows may include capital expenditures (e.g., buying new equipment or facilities) and investments in other businesses.

Financing Activities:

  • This section includes cash flows related to the organization's financing activities, such as issuing or repurchasing stocks and bonds, and taking on or repaying debt.
  • Cash inflows from financing activities may include proceeds from issuing new shares or borrowing money (e.g., loans).
  • Cash outflows may include repayments of debt principal, dividends to shareholders, and share buybacks.

The net cash flow from these three sections is usually summarized to determine the overall change in the organization's cash position for the given period. The cash flow statement helps stakeholders, including investors, creditors, and management, to assess the organization's liquidity, its ability to meet its short-term obligations, and its capacity for future growth and investments.

How to Configure the Cash Flow Statement in Odoo

Step 1:  Open the Accounting module in Odoo

Step 2:  Go to Configurations>Chart of Accounts

Step 3:  Select the account that is unclassified and requires classification into either operating, investing or financing activities. Go to the setup of the account as shown below.