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The Cash Flow Statement and Playbook

Cash Flow Statement and Playbook

Why is Cash Flow important?

Cash flow is undoubtedly one of the key elements for a small business to be successful. It’s not just about ensuring that cash is coming into the business but also making sure that cash is being managed and allocated to the areas it needs to go to for the business to thrive. Cash flow allows you to forecast upcoming expenses so you can prepare and allocate funds accordingly; this could mean avoiding late fees or being able to pay staff wages on time. Furthermore, cash flow also helps you track inventory levels and offer product/service pricing that fits in with your cash management strategy. As a result, cash flow isn’t just important; it’s crucial – clear cash visibility and cash management are essential components of any thriving small business.

What’s a Cash Flow Statement?

A cash flow statement is an essential tool for businesses, as it provides critical insight into the cash activity of a company. It is useful for understanding cash on hand and identifying cash shortfalls or surpluses that may affect its financial situation over time. It also shows how cash inflows and outflows have impacted business activities such as sales or investments. With detailed cash movement data revealed in the cash flow statement, individuals can gain greater visibility and make more informed decisions about managing their finances.

How is Cash Flow Calculated?

Cash flow is the lifeblood of any business, and it must be measured accurately to ensure that a company is solvent and healthy. To calculate cash flow, one must begin by determining cash inflows, cash outflows, and money available at the start and end of a given period. Inflows usually consist of cash received through sales, whereas cash outflows may include labor, taxes, materials, and supplies costs. By taking into account all cash inflows and cash outflows over a given time and subtracting cash on hand at the beginning from cash on hand at the end, a business can gain insight into its overall financial health. In addition, cash flow statements from successive periods can be compared to identify trends in cash availability.

Install a Cash Flow Playbook

As small businesses grow, their finances become more and more complicated. The Business Cash Flow Playbook will help you install a simple and effective way of managing money as it comes into the company.

When you install a Business Cash Flow Playbook, you will:

• Never accidentally run out of money — you will know well in advance whether your overall profit is shrinking
• Always have the money to pay taxes, even surprise tax bills
• Always have money for payroll
• Know how much money you can actually take from the business
• Have cash to invest back into the business, which will set you up for growth

A business without cash will crash! If you need help implementing business frameworks that can help your business grow, let’s connect!

Be intentional,


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