Cash flow is the measure of money flowing in and out of your business at any given time. In an ideal business cycle, you will always have more cash flowing in than flowing out. The reality is however, that most businesses have to produce or deliver goods/services to their customers while also paying their staff and suppliers before they get paid themselves.
This lag in payments in and payments out is often a major challenge for businesses and how well it is managed is critical to the business’ immediate financial health and long term sustainability.
(read more: http://toolkit.smallbiz.nsw.gov.au/part/6/27/131)