Cash Inflow

What is cash inflow?

Cash inflow is any money entering your business. When a client pays an invoice, that's cash inflow. When you receive a deposit for an upcoming project, that's cash inflow. When you take out a business loan, the money you receive is cash inflow.

For contractors and service businesses, the primary source of cash inflow is collecting payment on invoices for completed work.

Common sources of cash inflow

Money typically flows into small businesses through:

• Customer payments — Payments for invoices, the main source for most service businesses
• Deposits and retainers — Upfront payments before work begins
• Loans — Money borrowed from banks or other lenders
• Owner investments — Personal funds put into the business
• Asset sales — Selling equipment or other business property
• Interest and dividends — Earnings from business savings or investments

Managing cash inflow

Strong cash inflow keeps your business healthy. To maximize it: invoice promptly when work is done, offer convenient payment methods, follow up on overdue invoices, and consider offering small discounts for early payment on large projects.