Finance 2026-05-03 4 min read By Konvertibly Team

Cash Flow Calculator: Tracking Business Income and Expenses

Understand operating, investing, and financing cash flow — how to calculate free cash flow, why profitable businesses can still run out of cash, and what healthy cash flow looks like.

Cash Flow: Why It Matters More Than Profit

"Revenue is vanity, profit is sanity, cash is reality." A business can be profitable on paper but bankrupt in practice if customers don't pay on time or costs arrive before revenue. Cash flow is the lifeblood of every business.

The Three Types of Cash Flow

Operating (CFO): Cash from core business activities — sales, payments to suppliers and staff. This is the most important.
Investing (CFI): Cash used for or from buying/selling assets — equipment, property, acquisitions.
Financing (CFF): Cash from/to investors and lenders — equity raised, dividends paid, loan repayments.

Free Cash Flow (FCF)

FCF = Operating Cash Flow − Capital Expenditure (CapEx)
FCF is what's available to pay dividends, repay debt, or reinvest

Monthly Cash Flow for Small Business

Net Cash Flow = Total Cash Inflows − Total Cash Outflows

Inflows: sales receipts, loans received, asset sales
Outflows: supplier payments, payroll, rent, tax, loan repayments

Why Profitable Businesses Fail

Timing gaps: Invoice sent in January, payment received in March — but staff paid in January
Overtrading: Growing too fast, using cash to fund inventory before sales arrive
Debtors default: Receivables that never convert to cash

30-day cash flow forecasting is the single most important financial habit for any business owner.

Calculate your business cash flow: Free Cash Flow Calculator