Your company's financial manager oversees finance and accounting functions and transactions. She is responsible for producing, analyzing and explaining the financial statements, generally made up of the balance sheet, income statement and cash flow statement. She is also responsible for preparing and adhering to budget reports. Both cash flow statements and budget reports play key roles in your company's financial management.

Budget Report

A budget report is a report that details what a company plans to spend over the coming accounting period, typically a year or a quarter. Once the year begins, the budget report tracks actual expenses and compares it to the planned expenses. This difference, called budget variance, allows you to determine budget accuracy and cost management. If your company far exceeds growth targets, you may adjust your budget report accordingly to reflect higher expectations.

Cash Flow Statement

The cash flow statement, or statement of cash flows, provides the link between what happens on the income statement and what appears on or disappears from the balance sheet. The cash flow statement shows how cash is generated in the operation of your business and how assets are utilized or created from cash. It records how cash flows into and out of three distinct areas of the cash flow statement -- operating, investing and financing. You record net income and any adjustments to reflect actual cash in the operating section. You record asset sales and purchases in the investing section and equity contributions or loan activity under financing.

Budget vs. Cash Flow

A budget's purpose is to identify revenue sources and expenses, then allocate resources in a way that optimizes operations and profit generation. A cash flow statement's purpose is to manage your company's cash flow. As a financial management and control tool, your budget report enables you to quickly see overages and excessive expenditures. This insight allows you to take actions to reduce spending or reallocate resources. In a similar way, the cash flow statement enables you to see where and why your cash is low or high, so that you can make the necessary adjustments.

Analysis and Tracking

Analysis and tracking of both budget reports and cash flow statements are essential to helping your company achieve its goals. If you far exceed your revenue goals, before you consider increasing expenditures, review your cash flow statement. If your cash inflow is low despite the growth, this indicates you may need to restructure how and when your customers pay you. This cross-checking can allow you identify both productive and destructive trends.