SHORT ANSWER · FLOW OF FUNDS
What is a flow of funds analysis?
A flow of funds analysis sums all the money that came into and went out of a set of accounts over a period, grouped by source and destination, so you can see where money moved between people and accounts. Tracing follows one sum; a flow of funds shows the whole picture. Both need every statement proven first.
DEFINITION
What is a flow of funds analysis?
A flow of funds analysis is a summary of all the money that entered and left a set of accounts over a period, grouped by where it came from and where it went.
EXAMPLE
What does a flow of funds summary look like?
One checking account over one quarter, with made-up round figures and one real line from our sample matter. Choosing a tool? See the best asset tracing software.
| Direction | Source or destination | Amount |
|---|---|---|
| In | Payroll deposits | 38,000.00 |
| In | Transfers from savings | 14,000.00 |
| Out | Card payments | 21,000.00 |
| Out | Transfers to an account outside the production | 18,000.00 |
| Out | Cash withdrawals | 8,150.00 |
| Out | Check 3285, Harbor Marine Supply | 2,450.00 |
| Net | In 52,000.00, out 49,600.00 | 2,400.00 |
The 18,000.00 going to an account nobody produced is the line that gets the next document request. The check payee comes from the check image, paired to its statement line as in Matter 25-117.
ZeraBooks builds the workflow around your matters and your template for free. No development charge, whether it’s a forensic department or one person.
HOW IT DIFFERS
How is a flow of funds analysis different from asset tracing?
Asset tracing asks where one particular sum went, step by step; see what is asset tracing? A flow of funds asks what moved through all the accounts, and between whom, over the whole period. Many matters start with the flow and then trace the lines that stand out.
A tracing rule such as what is the lowest intermediate balance rule? applies to the trace, not to the summary. ZeraBooks proves the statements under both and builds your tracing schedule around the matter for free.
Who uses a flow of funds analysis?
Forensic accountants in fraud and divorce matters, and investigators following money between people and businesses.
Does a flow of funds analysis need a diagram?
No. A diagram can help a reader, but the summary table and the rows behind it are what get checked.
Does ZeraBooks produce the flow of funds analysis?
No. ZeraBooks proves every statement and delivers the rows in your workpaper, where the analysis is built. It doesn’t draw flow diagrams.
FREE CUSTOM BUILD
Sum the flow from proven rows.
Then trace what stands out.
ZeraBooks ties every statement and flags the missing month, so the in and out totals cover the whole period.