This article explains how to use the Source & Apps (Sources and Applications of Funds) report to understand where your business sourced its funds and how those funds were applied.
It provides a clear breakdown of Balance Sheet movements to answer the common question:
“Where has my profit gone?”
Use the Source & Apps report when you want to:
• Analyse how profit and other funds have been applied across the business.
• Review changes in equity, working capital, and fixed assets.
• Understand the link between your Profit and Loss and Balance Sheet results.
The Source & Apps report compares Balance Sheet movements between two periods to show:
• Sources of funds – where the business obtained its funds (e.g. profit, new loans, or capital contributions).
• Applications of funds – how those funds were used (e.g. increases in working capital, asset purchases, or loan repayments).
It works by analysing changes between two Balance Sheet dates:
• Increases in liabilities and equity represent sources of funds.
• Increases in assets represent applications of funds.
By default, you generally want the Source & Apps report to reflect cash movements only.
Use the Non-cash Exclusions drop-down to remove accounting entries that don’t affect cash (such as depreciation or accruals).
This option excludes any Profit and Loss accounts that have not been linked to a cash, payables, or receivables account in the Chart of Accounts.
This ensures the report focuses on real cash inflows and outflows, rather than accounting adjustments.
You can add new categories or change the classification of accounts (for example, Current vs Non-current) under Chart of Accounts.
If you are reporting on a consolidated basis, you can allocate all inter-entity loans to the same category so they eliminate correctly on consolidation.
• Use the Source & Apps alongside the Profit to Cash dashboard to confirm movements between profit and cash.
• Excluding non-cash accounts provides a more accurate reflection of cash flow changes.
• Review your Chart of Accounts setup to ensure all accounts are correctly classified for reporting.
• The report can be exported to Excel for further analysis or presentation.