Castlemore Outlines the Differences between Direct and Indirect Cash Flow Accounting Methods

Contact Us
Thami Rajalingam
251 Consumers Road Parkway Place, Suite 1200
Toronto
Ontario M2J 4R3 
Canada
Phone:+1(416) 814-7427
info@castlemoreaccounting.ca

Toronto, ON, Oct 10, 2022 – Castlemore Accounting Services recently released a guideline that provides some insights about cash flow and the differences between direct and indirect cash flow accounting methods.

The spokesperson from Castlemore Accounting Services says that the direct method of cash flow accounting is more straightforward, and it shows all gross cash payments along with gross cash receipts. He mentions that indirect cash flow methods can adjust the net income or net profit from your non-cash transactions. To do this calculation, start with net income, add non-cash expenses, and adjust the losses and gains from the sale of assets.

As per the company’s main source, both indirect and direct methods arrive at the same conclusion. Businesses commonly use indirect methods since the statistics used in the indirect method can also be used in some other financial statements, making the method easier to calculate. Though many businesses use indirect methods, the folks at the budget and cash flow analysis Brampton prefer the direct method since it gives accurate cash flow payments and receipts.

He further adds, since the direct method can be advantageous because of its reliable numbers and clearer views, this method is best for preparing the cash flow statement to present it to the shareholders. The direct method is preferred mainly due to its standards of international accounting and generally accepted accounting principles. Plus, direct cash flow accounting is simple to understand and presents a comprehensive picture of financial health.

About The Company
Castlemore Accounting Services is one of the top-notch accounting services and budget and cash flow analysis Brampton.

They offer the finest, most affordable, customized, and reliable services to empower your financial security. They put your needs first and empower their clients to grow their finances. They provide tax education for people who are running small businesses and prepare them for tax season.

Contact
Thami Rajalingam
Castlemore Accounting Services
251 Consumers Road Parkway Place,
Suite 1200, Toronto, ON, M2J 4R3, CAN
+1(416) 814-7427
info@castlemoreaccounting.ca
https://www.castlemoreaccounting.ca/budget-and-cash-flow-services/