Inside the VCFO’s Toolbox: Cash Flow Reports

Inside the VCFO’s Toolbox: Cash Flow Reports

If “cash is king,” then a good cash flow report is the throne on which the king sits. This report is just one of the many tools that your chief financial officer will use to create a strategic plan that grows your business.

And when your CFO is McAllen’s best Virtual CFO from Abigail Y. Murray CPA, LLC, you’ll know you have the advisor that gives you all the financial information you need to make critical business decisions.

What is a Cash Flow Report?

Cash flow is the difference between how much money is coming into and going out of your business bank account at any given time. A cash flow report will usually summarize on a per month basis what that difference is, so, for example, more money coming in than going out will give a positive monthly cash flow result. If this monthly trend continues, you can expect to have a growing bank account over time.

Who Creates a Cash Flow Report?

This report usually falls under the responsibility of your financial officer since it deals specifically with cash. It’s worth noting, however, that it isn’t the same as an income report, something of which also includes other assets and liabilities before coming to it’s bottom-line conclusion on total profits or losses.

While your accountant usually creates the income report to help you determine how much tax to pay, your VCFO will create a cash flow report to help you determine when you are ready to grow your business and increase your future profits.

How is a Cash Flow Report Used?

Since the cash flow report includes previous monthly data, it is also a useful tool for predicting future account balances. These forecasts are what allow strategic plans to be made.

Expanding your business can lead to a continual outpouring of capital before any increased revenue is gained; your cash flow report will tell you when your business can absorb these extra costs without breaking the bank. By timing your growth correctly, your business will experience increased revenue with minimal risk.

Outsourcing to a VCFO Can Improve Your Business’ Cash Flow

Regular salary payments are just one example of when cash flows out of your business’ bank account, so why not reduce those expenses by hiring a Virtual Chief Financial Officer based in McAllen? By reaching out to Abigail Y. Murray CPA, LLC, you’re only paying for help whenever you actually need guidance on how to grow your business!

Schedule a meeting today to create a plan on how you’ll grow your business tomorrow.

Contact Abigail Y. Murray CPA, LLC