Cash-flow basics every founder must master

Cash flow is the oxygen of business. You do not need an MBA to manage it well — you need discipline and three simple weekly reports: 1. Operating cash flow statement: Cash in from customers minus cash out to suppliers and employees. If this is negative for more than 6 weeks, sound the alarm. 2. Cash runway report: Current cash balance divided by average monthly burn rate. Aim for at least 6 months of runway at all times. Below 3 months is an emergency. 3. Receivables aging summary: How much is owed to you and for how long? If more than 20% of receivables are over 60 days old, your collection process is broken. Three rules to live by: - Profit is an opinion; cash is a fact. A profitable business can still go bankrupt if cash is trapped in receivables or inventory. - Invoice faster, collect sooner. Offer a 2% discount for payment within 10 days. - Build a 3-month emergency reserve before any discretionary spending. Master these three reports and you will outlast founders with fancier spreadsheets and weaker cash discipline.