The Business Bulletin
Ask the experts Do you have a burning question that you would like the answer to? Or maybe you’re looking for some advice to help your business? In each edition some questions will be shared and answered by some of The Business Bulletin experts.
If you have a question – then email us and these experts will set about answering it for you. It can be on any business topic you like, be it finance, sales, marketing, operations, resources, strategy or personal development. If you would like a more immediate response, then raise your question on the “Ask The Expert” forum. Q. What is cashflow and how do I go about managing it? A. Cashflow as the name suggests is the money that flows in and out of your business each month. If the cash coming in is greater than the cash going out, your business is probably in good financial health. In short, by looking at cash inflows and outflows across a certain period, you can see precisely where cash has been generated and where cash has been spent. Cashflow should not, however, be confused with your profit, which is
or spent through a company’s main
Financing cashflow: Cash received
business activities, in the case of the
through debt (customers with credit
garage this would be for the MOT’s,
accounts with the garage) or paid
servicing and repairs. The money spent
out as debt repayment, such as a
at cashflow in more detail, it is
on parts, labour etc, compared to the
business loan.
generally broken down into three
money charged to the customer.
areas, namely operating, investing
Investing cashflow: Cash received
manually on a spreadsheet or using
or spent through investing activities,
accounting software the end result is
like assets such as high value tools
a pool of financial data which reveals
and equipment purchased for use in
cash situation of your business.
the business or investments in other
Wendy Tate Bean Counters
the surplus you’re left with at the end of accounting period. When companies start to look
and financing activities. Here’s a quick look of what that would mean in practice from the perspective of a local garage. Operating cashflow: Cash received
business ventures.
Whether transactions are entered
Issue 1 – Finance | 35
