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What is Cash Flow and How Can a Virtual Chief Financial Officer Help Improve it?

What is Cash Flow and How Can a Virtual Chief Financial Officer Help Improve it?

To run a successful business, you must have a solid cash flow. 

Understanding cash flow is key to prospering as a business owner. A virtual Chief Financial Officer (vCFO) can help you develop your business and triumph. Your vCFO will use several tools and strategies at their disposal, including cash flow reports, amongst other data sources, to create a strategic plan that helps grow your business.

The vCFOs at Gonzalez and Arrambide, Inc., can inform you about the financial information you need to make critical business decisions.

What Is a Cash Flow Report?

In short, cash flow is how much money is coming into your business and how much is going out. A cash flow report will summarize how your business is doing in this regard.

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 profit. It is possible to have a good cash flow result at the end of the year even if you were negative some months. 

It’s worth noting, however, that a cash flow report isn’t the same as an income report.

Who Creates a Cash Flow Report?

This report falls under the responsibility of a vCFO since it is per finances. While your accountant creates the income report to help you determine how much tax to pay, your vCFO will create a cash flow report to assist in determining when you are ready to grow your business and increase your future profits.

How Is a Cash Flow Report Used?

A cash flow report is useful for predicting future account balances. These forecasts are what allow strategic plans to be made. Your cash flow report will tell you when your business can operate with the extra costs that come with expanding without breaking the bank. 

By timing your growth correctly, your business will experience increased revenue with minimal risk.

Outsourcing to a Virtual CFO Can Improve Your Business’ Cash Flow

Owning a business can be extremely overwhelming and stressful, but by hiring a virtual Chief Financial Officer in Weslaco, you will be assisted with the financial services your business may need. By reaching out to Gonzalez and Arrambide, Inc., you’ll get the guidance you need to start or grow your business.