What is cashflow?

Definition of cashflow

Cashflow is money coming into, and going out of, your business. It can refer to physical cash in your hand, or cash in your business’s bank account(s). Cashflow is usually measured over a period of time, such as each month, or each quarter.

'Positive cashflow', 'healthy cashflow', or 'net cash inflow', means that your business has received more cash than it’s spent. This is usually a good sign, particularly if your business hasn’t received any money from borrowings as it means you are earning more than you’re spending.

'Negative cashflow', or 'net cash outflow', means that your business has spent more cash than it’s received. This isn’t usually a good sign, as it means your business is spending more than it’s earning.

Keeping track of your cashflow

Tracking cashflow is a top priority for any business. FreeAgent's cashflow view gives a monthly snapshot of the money coming in and going out, so you know at a glance if your business is making or burning cash.

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