Understanding cash flow is key to the success of any business! \ud83e\udd11 We\u2019ve got your attention now, right? <\/p>\n\n\n\n
Well, we want to see you succeed just as much as you do! Mwah <\/em>\ud83d\ude1a So, here\u2019s the low-down on cash flow.<\/p>\n\n\n\n Cash flow is a measure of the amount of money that comes into and out of your business during a specific period of time. And, it\u2019s extremely important to track it. <\/p>\n\n\n\n All businesses require funds for both day-to-day expenses<\/a> and long-term planning. <\/p>\n\n\n\n Day-to-day, it’s necessary for: <\/p>\n\n\n\n Tracking your cash flow also means you don\u2019t need to be psychic when it comes to projecting the future of your business. \ud83d\udd2e<\/p>\n\n\n\n This will help you to: <\/p>\n\n\n<\/div> \n\n The formula for cash flow is Net Cash Flow = Total Cash Inflows \u2013 Total Cash Outflows<\/strong>.<\/p>\n\n\n\n So, if you have:<\/p>\n\n\n\n To answer your question, no. Cash flow is the net cash generated by a business in a specific period of time. As we know, it\u2019s calculated by deducting cash outflow from cash inflow. <\/p>\n\n\n\n E.g. \u00a350,000 (cash coming in) – \u00a325,000 (cash going out) = \u00a325,000 cash flow <\/p>\n\n\n\n Whereas, net income is the amount a business makes after deducting expenses, taxes <\/a>etc.<\/p>\n\n\n\n E.g. \u00a35,000 (Total Revenue) – \u00a31,000 (Total Expenses) = a Net income of \u00a34,000. <\/p>\n\n\n\n Revenue is the amount of money made from sales of a company\u2019s products and\/or services during a specific time period (normally a year), before any expenses, taxes etc. are deducted. \ud83d\udcc5<\/p>\n\n\n\n Like a weather forecast, it gives you insights into the future.\u00a0Specifically, it gives you an idea of your business\u2019s projected net income, expected costs and expenses, and estimated outgoings.\u00a0<\/p>\n\n\n\n And, it helps you keep your head in the game. \ud83c\udfc0<\/p>\n\n\n\n Like you\u2019d take an umbrella out on a forecasted rainy day, this forecast helps you make decisions about whether you need to cut expenses, generate more income, or carry on as you were. \u2602\ufe0f<\/p>\n\n\n\n Have you already guessed it? \ud83e\udd14 To calculate your cash you\u2019ll need to keep track of your business’s income and expenses<\/a>. Luckily, we\u2019ve got just what you need. <\/p>\n\n\n\n Our free bookkeeping tools<\/a> can help you keep track of your income and expenses all year, every year! Oh, and they\u2019re free. <\/p>\n\n\n\n Mic drop \ud83c\udfa4<\/em><\/p>\n\n\n\n Our accounting software gives you a 360 view of your finances<\/a>. With everything <\/em>all in one place, you can keep track of the money coming into your business. <\/p>\n\n\n\n Upload pictures of your receipts directly to Taxfix and let our AI-powered data extraction tool pull your spending<\/a>. Store them online until you\u2019re ready to use them. <\/p>\n\n\n\n Impressed? Well, there\u2019s more where that came from.\ud83d\udc47<\/p>\n\n\n\nWhat is cash flow?<\/h2>\n\n\n\n
Why is it important?<\/h2>\n\n\n\n
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How is it calculated?<\/h2>\n\n\n\n
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Does it equal net income?<\/h2>\n\n\n\n
What does a cash flow forecast do?<\/h2>\n\n\n\n
What do I need to keep track of ?<\/h2>\n\n\n\n