Cash Flow means the flow of cash in and out of a business. It takes into account the timing of cash coming into the business from various sources e.g. sales, loans, tax refunds, interest etc. It also accounts for cash going out of the business, e.g. expenses, taxes, dividends, asset purchases, etc. The timing of cash movements is different to that of profit and loss.
Profit and Loss Reporting involves measuring costs against sales when they are made, not when you get paid for them, if you offer terms to your customers. This is where lots of businesses get into trouble. They are making plenty of sales but aren’t getting paid quickly enough. On top of that, they are paying suppliers, staff, landlords, etc. and then end up with Cash Flow squeeze.
Our virtual CFOs provide tailored cash flow advisory services to help get your business back on its feet.