How important cashflow is as a general sense

In the other day I was helping to develop a business plan.

The original version the client prepared included the reimbursement to a bank as a cost. In the other hand a depreciation was not included.

As you may know the reimbursement to a bank is not a cost, while a depreciation should be included as a cost.
This concept is very much basic for accountants, but not for everyone.

However the point was that the client’s view was how much the cash balance remains on his hand.

It is also an accounting basic that a profit in accounting is different from a cash balance on hand. However “cash is king” for a management is very important to see how much the cash balance will be.
The client knows the cash flow management in a general sense.

An accountant may pay attention to an appropriate transaction in accounting, but the true engine running a company is cash generation.

We may always want to realize how much the cash will remain and what the source of cash generation is.

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