Accounting glossary
What is cash flow?
The movement of money in and out of the business over a period. A profitable company can still die of cash starvation — profit is earned on paper, but rent is paid in cash. The cash flow statement decomposes the movement into operating, investing and financing activity.
Example
A month shows $196,220 in and $66,639 out, a net movement of $129,581. That is cash flow — and it is a different question from profit.
A business can invoice $200,000 in a month, book it all as revenue, and still fail to make payroll if none of it has been collected yet.
In SeroBooks
A full Cash Flow Statement beside the P&L, plus an operational cash dashboard. Cash flow software →