Cash Outflow

What is cash outflow?

Cash outflow is money leaving your business. This includes everything you pay for: materials, wages, rent, utilities, loan payments, taxes, and any other expenses. Managing outflows is just as important as generating inflows—you need to ensure you always have enough cash to cover your obligations.

Common cash outflows

Typical business cash outflows include:

• Operating expenses — Rent, utilities, insurance, subscriptions
• Materials and supplies — Costs for specific jobs
• Wages and contractor payments — Paying people who work for you
• Loan payments — Principal and interest on business debt
• Equipment purchases — Tools, vehicles, machinery
• Taxes — Income tax, payroll tax, sales tax remittance

Controlling cash outflow

Time your outflows strategically. Pay bills on time but not early unless there's a discount. Negotiate favorable payment terms with suppliers. Avoid unnecessary purchases during tight periods. Understanding when money needs to go out helps you ensure inflows arrive in time to cover them.