Insights | Oberlander & Co

Long Term Vs. Short Term Cash-Flow

Written by Jacob I. Oberlander, CPA | February 3, 2022

We all know that when it comes to business, "Cash Is King." There is an important distinction between short-term and long-term cash flow.

 

Short Term Cash Flow
Short-term cash flow has its purpose of helping you with creating a detailed plan of what needs to be paid this week and up to 90 days. This is used to pay short-term bills, lines of credit, and payroll. Calculating your short-term cash flow is something that you can easily do by yourself. Your QuickBooks ledger should be able to help you with that. If your business is a bit more complex, some third-party software will assist you with this.

Long Term Cash-Flow
This is when you need a high-level overview of the company's needs beyond the next 90 days. This will help plan for the next 1 to 5 years, and with your long-term growth,  and help you determine if additional finance will be needed down the road.

 

 

Keep in mind that cash flow is not the same as profit! Check out this article to learn more about this.

 

If you need help with long-term cash flow, we can help you with that as part of our Virtual CFO services. You can learn more here.