Understand how they effect your balance sheet

Unit 8

Most business will have trading cash flows as highlighted in the diagram. Cash will come from customers; although not immediately the sale is made if credit is given. Suppliers and employees will take cash from the business, but again there will be a timing factor to take into account. Other regular cash outflows will be interest to lenders of funds, taxation and dividends or drawings to owners.


Other cash flows take place when the business purchases equipment, stock, and makes loan repayments as well as the interest. The business may also decide to make investments which could include investments in other businesses. The credit terms given to customers need to be funded until the customer pays. Sometimes a business also uses credit from suppliers as a source of funds.
Clearly an important source of funds is the profits from past trading known as retained earnings.



1st May 2019

The right tool for the job

Charities face the same regulatory pressures as commercial organisations but, in addition, must also deal with complex sector-specific reporting requirements intended to demonstrate good stewardship to supporters and regulators alike.

1st January 2019

VAT Refund Scheme

HMRC has updated VAT Notice 1001 on the VAT Refund Scheme for qualifying charities.

1st April 2016

Dividend Allowance

From 6th April 2016 the Dividend Tax Credit will be replaced by a new, tax-free, Dividend Allowance. The new Dividend Allowance means that you won't have to pay tax on the first £5,000 of your dividend income.