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Understanding Cashflow

Cash flow is simply the cash that flows in and out of a business. Any cash received is an inflow, and money spent are outflows. Companies can value their business performance based on how much positive cashflow they have, which maximises the free cash flow (cash left after money spent).

A business has inflows of cash from sales, and spends on expenses such as supplies, wages, tax and rent. Positive cashflow after expenses have been paid indicates a company is performing well and is financially flexible, meaning they can invest money into other areas to continue growth, return money to shareholders and ensure future financial protection for the business.

Cash flow is analysed using a cashflow statement. Senior financial officers or accountants will use this to understand how well a business is managing their outflows vs the inflow, and to forecast performance for investors or growth projects.

It is important not to confuse cash flow and profit- cashflow represents a real time analysis whereas profit indicated how much money a company makes overall after expenses are deducted (on record).

How can Soldi Partners help?
Our fully qualified team work closely with businesses, carrying out bookkeeping duties and managing and forecasting cashflow. With an expert eye, and experience in keeping healthy cashflow, we can take on the bookkeeping burden and grant you more time to grow your business.

Want a free copy of a cash flow statement? Download one here.

Want us to discuss any particular topics? Let us know!

Kindest,
Theresa

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It’s tempting to jump on the new year, new me, mindset in January. However, as we come to the end of another cold and dark month, people’s good intentions start to break down. Relate?
So, how can you remain motivated to keep working on your goals beyond January?
We have collated some top tips to keep the fire in your belly alight and stay inspired beyond the long, dreary January days.

1. New routine getting boring? Update it. Pick out the bits that have worked well for you and alter the things that aren’t serving you as well as you intended. Just because you committed to a new routine doesn’t mean it can’t be adapted if it’s not quite working. This mantra can be applied to lots of areas too – always ask the question “Is this still serving me as it should?”

2. Have a shower when you get up. Having a shower decreases levels of melatonin throughout the body which increases your energy levels. It also encourages your blood flow which boosts oxygen levels within the brain making you feel more alert. Don’t think about it. Just do it. (It will get easier as the mornings warm up!)

3. Listen to a motivational podcast. I love the High Performance with Jake Humphries and Diary of a CEO with Steven Bartlett to give me new ideas and outlooks for both business and personal reasons. It’s both reassuring and inspiring to listen to some of the successful people tell their stories.

4. Track your January achievements. Put a positive spin on January and write down all of those small wins and achievements. If you can do it in January… you’ll do it in February and so on. Take it one month at a time.

5. Identify Key tasks. Breaking down those big goals into smaller and more achievable tasks is a classic way to avoid overwhelm and increase the likelihood of success. We are already in chapter two of twelve!

6. Remain positive. Having a positive attitude takes daily practise. But once you learn how to see the positive, see the lesson and see the potential in every situation, you will begin to see your life change.

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