Cash Flow Basics
- Kristin Farquharson
- Sep 15
- 2 min read
When you run a business, one of the most important numbers you need to understand isn’t profit — it’s cash flow. Even profitable businesses can run into trouble if their cash flow isn’t managed properly. In this post, we’ll cover the essentials of cash flow, why it matters, and how you can keep it healthy.
What Is Cash Flow?
Cash flow is the movement of money in and out of your business.
Cash Inflow: Money coming in, like customer payments, loans, or investments.
Cash Outflow: Money going out, like rent, payroll, supplies, or loan repayments.
Think of it like your business’s heartbeat — steady cash flow keeps everything moving.
Why Cash Flow Matters
Bills Get Paid on Time: Healthy cash flow ensures you can cover expenses without stress.
Prepared for Emergencies: Extra cash reserves mean you can handle unexpected costs.
Supports Growth: Positive cash flow gives you room to invest in new opportunities.
Peace of Mind: No more guessing if you’ll have enough money at the end of the month.
Tips to Improve Your Cash Flow
Invoice Promptly – Don’t wait weeks to bill clients. The sooner invoices go out, the sooner payments come in.
Follow Up on Late Payments – A gentle reminder often speeds things up.
Separate Business & Personal Accounts – Keep your business cash clear and easy to track.
Plan for Seasonal Fluctuations – If your business has busy and slow seasons, budget accordingly.
Review Regularly – Look at your cash flow statements each month, not just at year-end.
Tools That Can Help
Accounting software like QuickBooks Online makes cash flow tracking much easier. With built-in dashboards, you can see at a glance whether more cash is coming in than going out — and spot red flags early. Let us create a customized Cash Flow document for your business using exported documents from your accounting software.
Final Thoughts
Cash flow doesn’t have to be complicated, but it does need attention. By monitoring it regularly and putting good systems in place, you can avoid stress and focus on what matters most: running and growing your business.
📌 Need help understanding your cash flow? Kristin’s Bookkeeping & Business Advisory Services can provide clear insights and strategies to keep your business financially healthy. Contact us today.
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