Cash flow is the real-time movement of money in and out of your business. While profit shows if your business is making money on paper, cash flow reveals if you have the actual funds available to pay bills, staff, suppliers, and invest back into the business. There are three main components of cash flow:
What is Cash Flow
- Operating Cash Flow: Cash from everyday business operations, like sales and customer payments.
- Investing Cash Flow: Cash tied up in long-term investments, such as equipment purchases.
- Financing Cash Flow: Cash moving through borrowing, repayments, or equity investments.
Good cash flow management is essential because, even with strong profits, a lack of available cash can put your business at risk. Without positive cash flow, you may struggle to meet financial obligations or miss growth opportunities.
Need help managing your cash flow? Let 786 Venture CPA optimize your cash flow strategy. Our experts can ensure you’re not only profitable but also cash-healthy, with a solid plan to meet every business need.