Anne Ahira | Cash Miller

Anne Ahira News - Ahira - Cash Flow Is King! by Cash Miller

The first thing we need to make clear is what exactly is cash flow? This is how I explain cash flow. It is the amount of money you have left during a given period of time once all your bills are paid. But lets not confuse this with profit and loss statements. Cash flow is a physical thing, how much actual cash is left in the bank. Profit and loss statements are recordings in your financial statements but don't reflect physically held money. And it's cash on hand we're most concerned about.

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Now if you run a retail business that generates immediate cash from each sale then cash flow and profit and loss statements will more closely reflect each other. But if your business is in the position of having to bill your customers and then waiting to get paid then cash flow becomes the more important of the two.

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