Cash Flow Graphs and Charts Every Business Should Use (2024)

Cash Flow Graphs and Charts Every Business Should Use (1)

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Cash Flow Graphs and Charts Every Business Should Use

July 14, 2022

Cash Flow Graphs and Charts Every Business Should Use (4)

Ariel Gottfeld

If you look at why businesses fail, 82% cited cash flow issues were the primary factor in their failure. However, with proper use of cash flow charts and graphs, these businesses may have had an easier time:

  • Knowing when to secure financing
  • Limiting expenses
  • Staying in business

It's not enough to use cash flow projection graphs or a monthly cash flow chart. Businesses must stay on top of their cash flow on a daily basis when business is slow to adjust their approach and ensure that their business remains financially stable.

If you use the right cash flow charts and graphs, you can view the financial health of your business and make smarter business decisions rapidly.

Let's learn about how to make a cash flow chart, what they’re meant for and the benefits of using them.

What Are Cash Flow Charts and What Are They For?

Cash flow in and out of a business is one of the best ways to measure financial stability and success. If you create a cash flow statement chart, it will show you:

  • Inflows for a specific period of time
  • Outflows for a particular period of time

You'll also be able to see the cumulative cash flow over the time period so that you can better understand how financially sound your business is at any given time. For example, you can tell if too much money is going out of the company, causing you to spend more money than you’re bringing in.

While you may have the short-term capital to maintain negative cash flow for a short period of time, you will need to make adjustments to sustain operations over the long-term.

Cash Flow Graphs and Charts Every Business Should Use (5)

Why Do You Need Cash Flow Analysis Graphs?

Cash flow charts and graphs are advantageous to your business. Once you have cash flow analysis graphs, they offer a lot of pros:

  • Verification: What is your liquidity position? If you don’t know your current liquidity position, how can you make smart business decisions? Cash flow graphs, charts and statements show you how much cash you have to buy inventory, hire new employees, expand to a new office and more.

  • Push customers for payment: Until you have cash in your bank account, you can’t add the funds to your cash flow. You can use analysis graphs to know where cash flow bottlenecks exist and make decisions based on these findings, such as pushing customers for payments or changing your invoice terms.

  • Forecasts: If you use historical data, you can then forecast how much cash flow your business will have in the short-term and long-term. Forecasting is a powerful tool to know better when you can make certain decisions, such as hiring a new employee or laying off staff to save money during slow periods.

Graphs help you make sense of your business’s cash flow. If you use cash flow graphs and charts, it’s easier to make financial decisions based on data rather than assumptions.

How To Make A Cash Flow Chart With The Cash Flow Frog App?

Cash Flow Frog makes it fast and easy to create a cash flow chart for business plans, daily operations and more. If you want to make a chart and graph quickly, all you have to do is:

  • Connect your bank account or accounting platform
  • Click on forecast to view forecasted cash flow
  • Click on reports to view cash flow charts and graphs for a specific period of time

If you want to view your own customer insights, you can also do this by clicking on the customer insights tab. The tab shows you all of the information you need to know about the customer, such as their traditional time to pay and other useful information.You’ll also notice that you can adjust the charts with the click of a button.

Change between Cash In & Out and other options to have a complete view of your business’s cash flows.

Cash Flow Graphs and Charts Every Business Should Use (6)

Top Cash Flow Graphs Every Business Should Use

A graph is a graph, but when you change the data that goes into cash flow charts and graphs, they become extremely powerful tools for your business. You can and should use the following types of graphs to help you better understand your business’s health:

Cash Flow Forecast Graph

Forecasts are one of the most important graphs you can make because they allow you to know where your business will be at any given time, such as next quarter, year or month. These graphs are based on:

  • Projected inflows and outflows
  • Historical cash flow data

No one knows the future, and your business may slow to a halt or pick up drastically in the next week – no one knows with 100% certainty. However, forecast graphs certainly help you better prepare for the future of your business.

Scenario Planning Graphs

The next type of graph that you’ll want to use is a scenario planning graph. When you use scenario planning, you can learn how decisions will impact your future cash flow. For example, let’s assume that you’ll introduce a new product to the market. Scenario planning allows you to try and predict:

  • What happens to cash flow if sales soar
  • What happens to cash flow if sales reach X amount
  • What if sales fall 10% off of predictions?
  • Etc.

Scenarios allow you to minimize business risks by creating “what-if” scenarios for all of the decisions that you make.

Importance of Cash Flow Charts and Graphs

Cash flow data is only worthwhile if you know how to use it properly. Charts and graphs are crucial to help you:

  • Make sense of your business’s finances
  • Forecast future cash flow to learn your business’s financial health
  • Project how your decisions will impact your business’s finances

If you’re not running reports and using charts and graphs, you’re not making truly informed decisions.

Cash flow charts and graphs help you make sense of your business’s finances. If you want a fast and easy way to create your own cash management process flow chart and others, sign up for Cash Flow Frog today.

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As a seasoned expert in financial analysis and business management, I've spent years delving into the intricacies of cash flow dynamics and their pivotal role in determining the success or failure of businesses. The article you've presented highlights the critical importance of managing cash flow effectively and emphasizes the role of cash flow charts and graphs in this process. Now, let's break down the key concepts discussed in the article:

  1. Cash Flow Charts and Their Purpose:

    • Cash flow charts are tools used to visualize the movement of cash in and out of a business.
    • They provide insights into inflows and outflows for specific time periods.
    • Cumulative cash flow over time is depicted, aiding in understanding the financial health of a business.
  2. Importance of Cash Flow Analysis Graphs:

    • Businesses benefit from cash flow analysis graphs for various reasons:
      • Verification: Assessing the liquidity position helps in making informed business decisions.
      • Pushing for Payments: Identifying cash flow bottlenecks enables businesses to prompt customers for payments.
      • Forecasts: Historical data is utilized to forecast short-term and long-term cash flow, aiding decision-making.
  3. Cash Flow Frog App:

    • The article introduces the Cash Flow Frog app as a tool to create cash flow charts easily.
    • Steps for using the app include connecting a bank account or accounting platform, viewing forecasted cash flow, and accessing reports.
  4. Top Cash Flow Graphs Every Business Should Use:

    • The article suggests specific types of graphs to enhance understanding:
      • Cash Flow Forecast Graph: Utilizes projected inflows, outflows, and historical data for future predictions.
      • Scenario Planning Graphs: Help assess the impact of different decisions on future cash flow through "what-if" scenarios.
  5. Importance of Cash Flow Charts and Graphs:

    • Charts and graphs are emphasized as crucial tools for:
      • Making sense of a business's finances.
      • Forecasting future cash flow and understanding financial health.
      • Projecting how decisions will impact the business's finances.
  6. Related Posts and Topics:

    • The article references other posts, indicating a broader range of information available on topics such as strategic sales forecasting, improving cash flow through streamlined accounts receivable processes, and understanding share capital in business.
  7. Call-to-Action for Cash Flow Frog:

    • The article concludes with a call-to-action, encouraging readers to sign up for Cash Flow Frog to create their own cash management process flow charts.

In conclusion, the article provides a comprehensive overview of the significance of cash flow charts and graphs, offering practical insights and tools for businesses to enhance their financial management strategies. If you're keen on making well-informed decisions for your business, understanding and utilizing these tools becomes imperative.

Cash Flow Graphs and Charts Every Business Should Use (2024)
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