Definition
Cash flow is the movement of money into and out of a business over a period. Positive cash flow means more cash came in than went out. Invoicing directly drives cash flow: how quickly you invoice, your payment terms, and how reliably clients pay determine when revenue actually becomes usable cash.
Cash flow in practice
A profitable business can still fail from poor cash flow if invoices are paid slowly while expenses are due immediately. Deposits, shorter terms, recurring billing, and prompt follow-up all smooth cash flow.
Frequently Asked Questions
How does invoicing affect cash flow?
Every day between finishing work and receiving payment is a day your cash is tied up. Invoicing immediately, using shorter terms, and automating reminders shorten that gap.