By far the most critical aspect of your business is cash flow.
Cash flow is simply the movement of money in and out of your
business over a certain period of time. Cash flow is determined
by preparing a cash budget. Preparing a cash budget and knowing
how to use and manage cash flow is vital to your success. The
cash budget can be more important than the forecasts of profits
because it details the amount and timing of expected inflows and
outflows of cash. Usually the level of profits during the
initial stages of your business will not be sufficient to
finance operating asset needs. Moreover, cash inflows do not
match outflows on a short-term basis. The cash flow forecast
will indicate these conditions and enable you to plan cash
needs. By understanding cash flow you will be able to answer one
of the most important questions confronting you right now: how
much money are you going to need to start your business? A
monthly cash budget will show you.: The amount of cash you start
with (Total Cash) at the beginni