opening balance, saving accounts exclude from cash flow

[Mike or Penny Novack]

Yawar Amin wrote:

>Hi
>
>If your cash flow report in Gnucash doesn't include your account transfer
>from one bank to another, it's doing the right thing. Balance transfers
>between different asset accounts don't count as cash flow; only income and
>expenses do. (Somebody please correct me if I'm wrong.)
>  
>
Close

The correct answer in this case. An ordinary savings account is still 
"current assets" and would be considered cash in hand just like money in 
your checking account. If these accounts were with the same bank, not 
uncommon to have an arrangement where in case the checking account 
balance went negative, the bank would do an automatic transfer between.

But was that savings in a less liquid form, say a time deposit of some 
sort, then yes, you might want that to be reflected in your "cash flow" 
as the money might not be immediately accessible. A less common 
situation these days where bank products offered include "money market" 
accounts and CDs that allow withdrawals (affects what rate interest 
received, but CAN be withdrawn before due date).

You can be in fine economic shape with regard to the balance sheet but 
still have a "cash flow" problem.

Michael