Cash Line

Posted on November 04, 2011 by Admin
Cash Line

Cash Line

Often a small business owner will concern themselves with their profit and loss statements first and all the other indicators about the health of a business second. If this is the case for you then you may be making a grave mistake. Of course you want to know if your business is making money or losing money but neither one will tell you if you are going to have the actual cash to pay the bills. That’s where a cash flow statement comes in.

Your Cash Flow Statement

Your company cash flow statement is actually a better indicator for determining the health of your business. To explain it is pretty simple. The statement tells you exactly how much money you are collecting over a certain period of time, say, for example, each month, week, or day. If you have a business that collects cash on a daily basis then you can track your daily average. But if you have to wait 30 days or more to see a check then you track how much you take in on an average week or month.