Cash Flow is Important
The importance of the cash flow metric in a business cannot be overstated. As Certified Public Accountants (CPAs), we notice that many of our business owners pride themselves on their profits. But often, they have little to show for it in the cash department.
There is a distinct difference between cash flow and profits. Both metrics are vital to the health of a business. But cash flow ensures that a business can pay its bills and staff, keeping the business operational.
Discussion and analysis of cash flow problems can take time. We always let them know there are many ways to improve cash flow, from cutting costs in the right places to negotiating better terms on their purchases. But the first piece of advice we always offer them (and it’s often overlooked) corresponds to timely invoicing.