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Francis validates your cash flow statement by comparing the ending cash balance on the statement to the cash asset account from your accounting system. A passing check for actuals gives strong confidence that the cash flow statement is set up correctly, and that the forecast is built on solid foundations.

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How the check works

Francis subtracts the ending balance on the cash asset line item (mapped to your GL) from the ending cash on the cash flow statement: 
round("Balance sheet"."Assets"."Current assets"."Cash"[0] - "Cash end period"[0]) # Should return zero
A non-zero result means either the cash flow statement is structured incorrectly, or there is an issue in your bookkeeping data.

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Check fails for actuals months

Work through these steps in order. The earlier steps catch structural errors; the later steps catch journal-entry-level issues.

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P&L and balance sheet prerequisites

1

Check account mappings

Have all P&L and balance sheet accounts been mapped? The cash flow statement depends on these mappings.
2

Check for manual overrides

Are there manual overrides in the P&L or balance sheet that cause calculated values to diverge from your accounting system?
3

Check P&L subtotals

Are the P&L subtotals set up correctly, producing an accurate net profit line? This line feeds directly into the cash flow statement.
4

Resolve the BS check first

Is the balance sheet check passing? Resolve that first.
5

Check for non-GL line items

Does the P&L or balance sheet contain line items with values not sourced from your accounting system?

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Cash flow statement line items

1

Confirm all cash movements are included

Are all line items that represent cash movements included in the cash flow statement?
2

Confirm non-cash items are excluded

Are all non-cash line items excluded? Common items incorrectly included:
  • Depreciation (P&L) and accumulated depreciation (contra-asset)
  • Income from subsidiaries (P&L) and investment in subsidiaries (asset)
3

Check multi-currency adjustments

If you use multiple currencies, have you made the relevant adjustments? See the Currency integration.

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Cash flow statement formulas

1

Check for missing formulas

Are any formulas missing? Check for cells that are blank where a formula should be.
2

Check signs

Are the signs correct? Asset formulas need a minus sign; liability and equity formulas need a plus sign. An increase in liabilities or equity means you’ve gained or kept liquidity. An increase in assets means you’ve tied up liquidity.
3

Check balance sheet movement deltas

Are balance sheet movement deltas set up correctly (this period minus previous period)?

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Journal entries

1

Check for cash journals in non-cash lines

Have any cash journal entries been posted to non-cash line items, causing them to be excluded from the cash flow statement? Look for journal entry descriptions that suggest cash activity: invoice allocation, expense.
2

Check for non-cash journals in cash lines

Have any non-cash journal entries been posted to cash line items, causing them to be incorrectly included? Look for descriptions that indicate non-cash activity: depreciation, subsidiary, adjustment entry.
If the check is off in only one or a few months rather than consistently, the issue is likely a specific journal entry rather than a structural error.

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Check fails for forecast months

Forecast the cash asset line item by referencing ending cash on the cash flow statement. This links the two statements together, a method called using cash as a plug. See this guide. When the cash asset value equals ending cash on the cash flow statement, the check is always zero.