Understanding Cash Flow

What it is and how to manage it, quickly and simply

Cash flow is one of the most important parts of running a business—but also one of the easiest to overlook. The good news? It’s not as complicated as it sounds.

What Is Cash Flow?

Cash flow is the money coming in and going out of your business.

• Cash In = sales, services, grants, contracts

• Cash Out = rent, supplies, payroll, software

It’s not just about how much you make, it’s about when money arrives and whether it’s there to cover expenses.

Example: You made $5,000 in sales, but if $4,000 won’t hit until next month, and bills are due now. You’ve got a cash flow issue.

Why It Matters

You can be “profitable” on paper and still fall behind. Poor cash flow is a top reason small businesses struggle, not due to bad ideas, but because of poor timing or no plan.

How to Track It

No fancy tools needed. Use a simple tracker:

Date   | In     | Out    | Balance | Notes

-----------|------------|-----------|-------------|----------------

May 1  | $1,000 | $400   | $600    | Client A

May 5  | $0     | $300   | $300    | Rent

May 10 | $1,500 | $200   | $1,600  | New sale

Use Google Sheets, Excel, or a notebook, whatever works for you.

 3 Quick Tips to Improve Cash Flow

• Invoice fast: Don’t delay billing clients

• Check in weekly: Review what’s coming in and what’s going out

• Save during strong weeks: Build a small cushion to prep for slow times

  
  

Final Thought

Cash flow is about clarity and consistency. When you keep an eye on your money, even just once a week, you make smarter decisions with less stress.

Know your flow, and your business will grow.