What is the cash flow data?

So far you have already understood a lot about this subject, however, surely some doubts must go through your head. One of them concerns how to elaborate on this management. The truth is that having cash flow examples would come in very handy, wouldn’t it?

It is even possible to look for some cash flow examples, but they would not be as accurate. But, one thing that can help you a lot concerns the data that must be collected.

Of course, there is also a certain variable at this point, since some companies can gather the information that their scope of activity does not require. However, some of the data to include in your flow are:

  • Providers;
  • Operational expenses;
  • Expenses with raw materials;
  • displacement;
  • Commission on products and/or sales;
  • loans;
  • Salary;
  • Vacation;
  • Termination;
  • Bank accounts;
  • Taxes;
  • Maintenance;
  • investments;
  • Sales;
  • Fees;
  • ROI etc.

As said, this data will vary according to your performance, but, in short, the most important thing is to keep a very detailed cash flow in and out. And, whenever possible, break it down by category to keep everything tidy.

Other than that, a big mistake that some make is the fact of not putting the profit in the cash flow data, because they think that only expenses come in, but this is not true. However, to make a profit, one must consider all expenses.

What kind of problems does cash flow prevent?

We’ve already talked about what benefits a good cash flow structure provides, but there’s even more to it. The truth is that, due to the data that is collected, there are several problems that are avoided.

The cash flow structure allows you not only to control expenses but also for analysis, long-term planning, visualizing problems that are happening, and predicting those that may happen. Therefore, in the following topics, we will talk a little more about this.

1 – Late payment

There’s nothing worse than leaving your bills overdue, is there? It is true that this does not always occur consciously. After all, with millions of things to do, it can happen that we forget something.

However, when you have the cash flow chart, this does not happen. After all, it gathers all the recurring expenses. And, if at the end of the month the bills don’t add up, it’s certainly a sign that something is missing.

And not having this kind of problem has a great benefit: it avoids interest. Imagine having an expense of R$15,000.00, for example, and the interest for late payment is 2%. In this case, there would be a loss of R$300.00. So, by avoiding this problem, in a way, your company has some savings.

2 – Disorganization of resources

When you don’t have a cash flow, it’s normal not to know where the company’s money is going. After all, as there are several sectors, being lost in relation to the destination that the resources are having is practically a certainty.

However, one of the goals of cash flow is precisely to organize everything into categories. Therefore, you will always know where the company’s money goes and what value is destined for that area. After all, business cash flow allows you to view detailed cost and revenue reports, separated by sectors.

3 – Inaccurate analyzes

In financial mathematics, cash flow for operations determines accurate analysis of your business. This means that you avoid having a false positive prospect. After all, you may be selling a lot but making little profit.

On the other hand, there may be months in which the number of sales was not exponential, but generated good profits. That is, cash flow projections make you have a real sense of whether your company is on the rise or not, for example.

Other than that, if a sector is spending too much, the purpose of cash flow is to report such data. Therefore, it is a way to have a general and accurate parameter of the operation of your entire company, which guarantees you more accurate and efficient information.

4 – Not understanding the company’s growth

Through this method, it is possible to have a cash flow projection and, through it, you can follow and understand how much your company is growing. As we said at the beginning, the indication that a company is on the rise is not national recognition.

In fact, this is done through the financial issue, but through profits, not sales. After all, it can happen that you sell a lot and the month is not profitable. In the face of this, you are susceptible to falling into the false sensation of ascension.

So the cash flow projection actually shows how fast your business is growing. And this is especially so because it allows you to compare with previous months or even with the same month last year.

5 – Running out of money

When you learn to assemble cash flow, the company’s money becomes more organized and contained in the proper sectors. As a consequence, you get proper planning. And what does it mean? That prevents your company from running out of money at times.

What moves a company is a capital. So, running out of money is a nightmare and a problem that should be avoided at all costs. Therefore, when you learn how to set up a cash flow, you guarantee that your company will not go through this problem.

But not only that. In addition to the problem of running out of money, cash flow makes it possible to anticipate unforeseen events. Therefore, the financial health of your company becomes much more stable, which is great for your growth.

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