Overview

The cash flow statement should balance as soon as  you've captured the income statement and balance sheet, however, it is highly probable that you will have to process adjustments for non-cash items as well.

If the cash flow statement is not in balance prior to passing adjustments, you first must clear any balance sheet and cash flow statement errors identified by Flowkash, using the guidance provided under the Errors topic in the support centre.

Double entry adjustments

Adjustments in Flowkash are dealt with on a double entry basis. When you reverse a non-cash item, you must offset that reversal against whatever line item ("account")  formed the second leg of the double entry that originated that non-cash item in the income statement or balance sheet.

Flowkash blocks users from processing adjustments that do not balance. 

The following is an example of this principle in action:

Process

The steps for clearing non-cash items are therefore as follows:

1. Clear the following errors, if applicable:
   • Balance sheet does not balance (Current year)
   • Balance sheet does not balance (Prior year); and
   • Cash flow statement does not balance
     
     
     
     Guidance on how to address these errors is available here.
     
     
2. Clear non-cash items detected by Flowkash; and
3. Identify and clear any other non-cash items.

The method for clearing non-cash items in general is equally applicable to those detected by Flowkash or by the user respectively.