What is cash flow?
Cash flow is the difference between your cash at the beginning of the period and your cash available at the end of the period. Put another way, it’s the movement of money in and out of your business.
Your cash flow lies at the heart of your business. With proper cash flow management, you can minimize the possibility of a shortfall. Here are a few helpful tips:
- Rather than just project your cash flow for an upcoming month, try to plan ahead for the year. This will help you anticipate slow periods so you can set aside enough cash to cover your expenses.
- Getting paid on time – and in full – is key to managing your cash flow. See how you can get paid in as fast as 2 business days with a free Wave account.
- One of the common mistakes made by new business owners is not keeping enough of a cash buffer on hand. To avoid this, try to maintain at least two months of operating expenses in your business savings account.