What is cash flow?

Posted 04 January by Blaine Bertsch in Budget, Cash Flow, Entrepreneur, Small Business

Cash flow means both the amount of cash that is moving in and out of your business and when it flows into and out of your accounts.

Cash flow takes into account money that is coming into your business from all sources, most likely driven by your sales of goods and services but includes payments from other sources depending on your circumstances. It also includes all of the money that is leaving your account as you pay your expenses.

Cash flow isn’t just about amount of money since ‘money owed’ doesn’t count in cash flow, the timing of the payments is critical to track as well.

Many small businesses have gone out of business even though they appeared to have ample revenue and appear profitable ‘on paper’ but the cash simply didn’t arrive in time for them to pay their bills.

Money comes into your business from various sources:

  • sales of your goods or services (your operations)
  • from loans
  • investment in your business
  • selling assets, such as old equipment.

Money leaves your business in the form of expenses, as you pay your bills. Those expenses include costs related to operations, such as:

  • paying salaries
  • rent
  • utilities
  • equipment purchases
  • taxes
  • loan payments

It’s absolutely critical that you keep a constant eye on your cash flow and maintain up to date projections to ensure that you have time to react if a shortfall is on the horizon.


Dryrun is a simple way to forecast your cash flow, build budgets and track sales projections.

Learn More



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