Cash flow is the movement of money into and out of your business over time. Positive cash flow means more came in than went out during the period. It's a simple idea buried under intimidating jargon.
Profit vs cash flow
Profit is revenue minus expenses on paper. Cash flow is the actual timing of money in and out. A business can be profitable yet run short on cash — for example, you send a $6,000 invoice, the client pays 45 days later, but rent is due in between. That timing gap is why profitable businesses still run out of money.
The three types (kept simple)
- Operating — cash from day-to-day business activity. This is the one most solo owners need.
- Investing — cash from buying or selling assets (equipment, etc.).
- Financing — cash from loans, owner contributions, or repayments.
How to keep an eye on it
This is a backward-looking habit — seeing clearly what already happened, not predicting the future:
- Know what came in and what went out each month.
- Keep spending categorized so you can see where the money goes.
- Watch unpaid invoices and recurring subscriptions.
ExpenseBot keeps the money-out side accurate with automatic spend capture from receipts and Gmail, so your categorized picture is always current. The Cash Radar weekly heads-up surfaces bills due soon and items needing review from the documents it already captured.
This is educational, not financial advice.