Cash Flow Basics for Freelancers and Small Businesses
Cash flow is the movement of money into and out of a business. A profitable business can still face cash shortages if customers pay late or expenses arrive first.
The basic formula
Net cash flow = Cash received − Cash paid
A simple example
Prepare a short rolling forecast of expected customer receipts, payroll, supplier bills, tax payments and other commitments. Update it when invoices are paid or dates change.
Practical tips
Invoice promptly, agree payment terms in writing, follow up on overdue invoices and keep a buffer for predictable costs. Forecast cash timing, not just accounting profit.
Put it into practice
Use the free SoloBizKit calculators to test your assumptions and compare different scenarios. Keep your inputs and assumptions up to date as your business changes.
This guide is for general educational purposes only and is not financial, legal, accounting or tax advice. Rules and circumstances vary by location.