Talking to my accountant friend about our agency's cash flow made me realize we were tracking the wrong number

3 comments

3 Comments

Yeah, heard something similar on a podcast. They said focusing only on profit can hide a cash crunch if your clients pay slow. You need to watch your runway, how many months of cash you have left at your current burn rate. That number tells you if you're actually safe.

sean_dixon9610d ago

Totally agree, @holly_flores79, saw that happen to a friend's shop.

the_eric6d ago

Ever notice how this happens with regular people too? Like someone has a nice paycheck but their bank account is always empty cause bills hit at weird times. They look good on paper but live week to week. Same basic idea, just bigger numbers.