Cashflow And Why It Is Important For Your Business

When it comes to running a business of any size, managing cash flow is critical. Managing a small business without a cash flow forecast is similar to driving at night with sunglasses on. You might be moving in the right direction, but for how long?

So what is cash flow exactly? Why is it important for your business? And how can you ensure that it is managed successfully?

What Is Cashflow?

Put simply, cash flow is the moving of money in and out of your business. Cash flow comes in from customers who are purchasing your goods or services, money from investors, investments and so on. Cash flow comes out from wages, rent, payments, taxes etc.
A positive cash flow means you have more cash coming into your business that there is flowing out. Negative cash flow means there is more cash flowing out rather than in.

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