Cash Flow
The net movement of cash in and out of a business over a specific period — the difference between cash received and cash spent.
The cash trajectory chart shows your projected cash balance month by month.
What is Cash Flow?
Cash flow is the lifeblood of any business. It measures the actual movement of money — cash coming in from customers, investments, or other sources, minus cash going out to employees, vendors, and operations.
Cash flow is different from profit. A company can be "profitable" on paper but still run out of cash if customers pay slowly or expenses are front-loaded. This is why cash flow management is especially critical for startups.
There are three types: operating cash flow (from business operations), investing cash flow (from buying/selling assets), and financing cash flow (from fundraising or debt). For most startups, operating cash flow is the one that matters day-to-day.
Why it matters
Cash flow determines whether you can make payroll next month. Revenue on a contract doesn't help if the customer pays net-60 and your bills are due now.
Positive cash flow means more money is coming in than going out — you're building a buffer. Negative cash flow means you're depleting your reserves. Most startups have negative operating cash flow early on, which is why runway management is so important.
Formula
Cash Flow = Cash Inflows - Cash Outflows
Example
In March, your company received $35,000 from customers and $0 from other sources. You paid $50,000 in salaries, $8,000 in tools, and $5,000 in rent. Cash flow = $35,000 - $63,000 = -$28,000. You burned through $28,000 of your reserves that month.
How RunwayCal helps
RunwayCal tracks your cash inflows and outflows to compute net cash position over time. The cash trajectory chart on Mission Control shows your projected cash balance month by month.
Common mistakes
- 1Confusing cash flow with revenue or profit — they measure different things
- 2Not tracking the timing of payments (when cash actually moves, not when it's invoiced)
- 3Ignoring seasonal patterns that cause cash flow to swing month to month
See your cash trajectory — past and projected
RunwayCal shows your cash position over time, so you see exactly when and why cash increases or decreases.
Track your cash flow → Start free