Cash Flow Only Flows When You Have Cash - A Bookkeepers POV

For any startup business owner, the most important financial truth is this: cash flow only flows when you have cash. Your business can be profitable on paper and still go under if it runs out of cash to pay bills, employees, or vendors. As a certified QuickBooks bookkeeper, I’ve seen too many startups fail. It was not because they had a bad business idea, but because they didn’t manage their cash flow from day one.

Businesses often face irregular income, and expenses often stack up to more than you expect. Without proper budgeting, even promising ventures can quickly fall behind if you have not prepared for it. The key is to forecast both income and outflows regularly. Do not focus on just the top line.

The good news? Cash flow doesn’t have to be complicated. I mean, my EPI formula is a simple as it gets: Expenses + Profit = Income. When you use this every month, you will know exactly what you need to run a profitable business - and if you do run into a cash flow issue, you will have your savings to supplement your income with. Remember: a lack of cash—not a lack of customers—is what ends most startups.

Before you focus on scaling or investing in growth, make sure your cash flow awareness is solid. It could be the difference of your business surviving and thriving in a world that is always full of ups and downs.

Let's walk through your cash flow together - Come join my weekly coaching calls:.