Financial Cash Flow Reporting And Controlling Of F Auto Spare Parts Company

Cash is cash on hand deposited to be ready to pay at any time. The cash in the cash flow statement includes not only the account of cash on hand, but also the account of Cash In Bank which to pay at any time, at same time it also includes the account of other currency fund which book the deposit outside, bank draft ,promissory notes and in-transit currency etc. It is noted that some deposit in cash in bank and other currency fund can't to pay at any time, for example time deposit can't receive at any time, they shouldn't to be looked as cash but investment; those fixed deposit if it can be withdrawn by advance notice, they should be included in the scope of cash.Cash equivalent is short time investment which is held by company, strong liquidity, easy to change into known amount of money and small risk in value change. Generally it refers to three months mature bond investment from purchase day to mature day. An investment is confirmed as cash equivalent must have four conditions: short duration, strong liquidity, easy to exchange into cash and small risk of value change. Among them, short time generally refers to from the date of purchase, three month mature.Cash flow is amount of cash flow in and cash flow out in some period .Cash flow information indicates if the enterprise operates well, if its money is shortage, if it has strong solvency. Thereby the cash flow information provides very useful information for investors, creditors and enterprise managers. It is noted that form conversion of cash can't generate cash in and cash out. For example enterprise draws cash from bank, it is cash form conversion and cash doesn't flow out from the company, so it doesn't constitute cash flow. Similarly, conversion between cash and cash equivalents doesn't belong to the cash flow. Cash flow reflects company's trade activities, investment activities and financing activities in some period by cash flow in and cash flow out.The cash flow statement is the statement which reflects company's cash flow in and cash flow out in some period. It is a dynamic statement. On one hand, from the reporting principle of view, cash flow is reported according to Cash Basis Principle. It adjusts the financial data from the profit information embodied in the Accrual Basis Principle to the cash flow information embodied in Cash Basis Principle. On the other hand, Cash flow statement is divided into three parts which are trade activities, investment activities and financing activities and every kind of activity is divided into separate detail items. These items reflect cash flow in and cash flow out of company business activities from different angle of view. They make up the disadvantage in supplying financial information of balance sheet and income statement. By cash flow statement the financial report user can find out the factors which influence the company cash flow and can valuate the ability of payment, the ability of cash turnover and the ability of payment off liability. By cash flow statement the financial report user can forecast company's future cash flow and these pieces of information provide strong supporting for their decisions. So influence of cash flow to a company is more and more important and even it is titled as Cash is King.So the accuracy of reporting cash flow and real time monitoring cash flow become first and basic important security in cash flow management. It is also premise in analysis and study cash flow. Only reporting cash flow accurately and in time, the statement of cash flow can influence every ability of payment, payment off liability and cash turnover and on the basis the statement of cash flow provides true, accurate and strong evidence for company's decision. This article starts from the problem in preparing cash flow statement of F auto spare parts company, summarized the improvement in preparing cash flow statement from manual to application of ERP system, thus improve the accuracy of the cash flow statement and work efficiency. On this basis, through matching the preparing cash flow statement and finance system of company, analyses the procedure, principles and methods of controlling cash flow and management cash flow, so as to realize the real time monitoring of cash flow.The innovation of this article lies in that it bases on cash management theory, by application approaches of reporting cash flow and study approaches of analysis of controlling cash flow and forecasting the cash flow budget, analyses the problem in reporting cash flow in F auto spare parts company and redesigns the preparation of cash flow and finds out the efficient approach to real time monitor cash flow by adopting convenient and quick way so that we can stronger management of cash flow.