You will have to estimate or project what will happen. Lenders and investors are interested in when you will make a profit and how large it will be. This information helps them decide the degree of risk and the terms of the agreement with you. Many small businesses do not make a profit right away. The cash flow statement is a monthly account that identifies sources of cash received by the business for operations, and how much is available after expenses have been paid.
Excess cash is carried over to the next month's statement.
If the operations is cash poor at the end of the month, new investments or increase in sales will be necessary to pay the past due and the next month's bills. Cash flow is simply matching incoming cash with expenses. The projected cash flow of your business is important. Remember, cash is the fuel that makes your business function. You need to know the amount of cash available to buy new merchandise or whatever else you need to keep the business operating.