What is cash flow?
There is a simple way to work out what your cash flow is: Decide on a time frame you want to calculate your business’s cash flow. It is usually on a monthly basis. Total all the money your business receives and subtract from this all the money your business pays out (its expenses)
What money will I receive?
For example:
- Sales income (cash or card)
- Payments from customers
- Loans received
- Investment income
- Grants or government support
What money is paid out?
For example:
- Rent
- Salaries and wages
- Purchases (stock, raw materials)
- Marketing costs
- Transport/fuel
- Loan repayments
- Tax payments