521: Unlocking The Secrets Of Small Construction Business Cash Flow

<h1 style="text-align: center;"><span style= "color: #0000ff;"><strong>This Podcast Is Episode Number 521, And It's About Unlocking The Secrets Of Small Construction Business Cash Flow</strong></span></h1> <p><span data-preserver-spaces="true">Cash is king! Construction Company cash flow is the movement of money in and out of your Construction Company; these movements are known in accounting circles as </span><em><span data-preserver-spaces= "true">inflow</span></em><span data-preserver-spaces= "true"> and </span><em><span data-preserver-spaces= "true">outflow</span></em><span data-preserver-spaces="true">. Inflows for your Construction Company primarily come from selling goods or services to your customers, but keep in mind that inflow only occurs when you make a cash sale or collect on receivables. Other examples of cash inflows are borrowed funds, income derived from sales of assets, and investment income from interest.</span></p> <p><span data-preserver-spaces="true">Outflows for your Construction Company are generally the result of paying labor, material, other direct and indirect costs of goods sold, and overhead expenses.</span></p> <p style="font-weight: bold;"><span style="color: #0600ff;">Is Cash Flow Same As Profit?</span></p> <p><span data-preserver-spaces="true">While they might seem similar, profit and cash flow are two entirely different concepts, each with completely different results. <em>Profit</em> helps calculate your taxes and report to the IRS. The idea of profit is somewhat broad and only looks at income and expenses over a certain period, say a fiscal quarter.</span></p> <p><span data-preserver-spaces="true">Cash flow, on the other hand, is a more dynamic tool focusing on the day-to-day operations of a Construction Company owner. It is concerned with money movement in and out of a Construction Company. However, more important, it is concerned with the times when the direction of the money occurs.</span></p> <p><span data-preserver-spaces="true">In theory, even profitable Construction Compa