Direct vs Indirect Cash Flow

Direct Cash Flow Method: Reports cash inflows and outflows explicitly from major operational, investing, and financing activities, providing a detailed view of actual cash movements.

Indirect Cash Flow Method: Begins with net income and adjusts it for non-cash items and changes in working capital to arrive at net cash flow from operating activities, offering a reconciliation between net income and net cash flow.

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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Enterprise Receivables Management System to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.

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