Glossary

Cash flow

The movement of money into and out of your business over a period, including the timing of when it arrives and leaves.

Cash flow is what your bank account sees: deposits in, payments out. Profit is different. A job can be profitable on paper while the cash from it arrives 60 days after you paid for the labor and materials.

Funders care about cash flow because it pays them. Merchant cash advance underwriters read it straight from your bank statements, and lenders add financial statements to see whether cash left after expenses covers a new payment.

Example: A month with $92,000 in deposits and $88,000 in payments leaves $4,000 of net cash flow. If $30,000 of those deposits land in the last week while payroll runs every Friday, the month can still run short.

A weekly cash forecast, rather than a monthly one, shows whether a new daily or weekly payment fits.

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