Cash Flow
Cash Flow refers to the movement of money going into and out of your business.
In Filipino MSME terms: ito yung “daloy ng pera” — kung magkano ang pumapasok na benta at kung magkano ang lumalabas na gastos.
Good cash flow means you always have enough money to pay suppliers, rent, salaries, and daily expenses. Poor cash flow can shut down a business even if sales are high.
Why Cash Flow Matters
For Filipino MSMEs, cash flow is critical because it:
- Keeps your business running — pambayad sa suppliers, renta, kuryente
- Prevents utang cycles — hindi ka laging nanghihiram
- Helps you survive slow months
- Supports growth — may pondo para sa inventory at expansion
- Improves financial stability — mas predictable ang operations
Many MSMEs fail not because of low sales, but because they run out of cash to operate.
Types of Cash Flow
- Operating Cash Flow — daily sales minus daily expenses
- Investing Cash Flow — buying or selling equipment or assets
- Financing Cash Flow — loans, repayments, or capital injections
Example / Context
Example 1 (Carinderia):
You earn ₱6,000 per day but spend ₱5,500 on ingredients, gas, and utilities. Your cash flow is only ₱500 — too tight for emergencies.
Example 2 (Online Seller):
You have many orders, but payouts from Shopee/Lazada take days. Meanwhile, you need cash for shipping and restocking.
Example 3 (Freelancer):
You receive big payments but irregularly. Without budgeting, you may run out of cash between projects.
Example 4 (Retail Store):
You have high inventory but low cash because customers buy on “lista” or delayed payment.
Related Terms
FAQs
1. What causes cash flow problems?
High expenses, slow-paying customers, too much inventory, low margins, or poor budgeting.
2. How do I improve my cash flow?
Increase margins, reduce unnecessary expenses, speed up collections, and manage inventory better.
3. Is cash flow the same as profit?
No. You can be profitable but still run out of cash if your money is tied up in inventory or receivables.
4. How often should I monitor cash flow?
Daily for food and retail businesses; weekly or monthly for service-based businesses.