Academy›💰 Money and records

Cash flow and stock

Why profitable businesses still run out of money — and how to avoid it.

⏱ 6 min Lesson 4 of 4

A sale on credit is profit today but cash only when the customer pays.

Every item that does not sell is money you cannot use.

Set a minimum for each item and reorder when you reach it — not when it runs out.

Count stock regularly and compare with your records; investigate the difference.

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📌What you need to know

List money coming in and going out for the next 4 weeks; it shows a cash gap before it happens.
Slow-moving stock: discount it, bundle it or stop buying it.
Negotiate supplier credit so you pay after you sell.
Count your fast movers weekly and everything else monthly.

Buying in bulk for a discount, then having no cash for rent.

Never counting stock, so theft and damage stay hidden.

Giving credit freely while paying suppliers cash.

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Tip. Every Monday, look at three numbers: cash in hand, what customers owe you, and what you owe suppliers.

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