Before you search for långuiden artikkel, it is important first that you understand how cash flow works. Simply speaking, cash flow is the movement of money in your business both incoming and outgoing. Despite the fact that cash flow looks like it’s going out of business, it actually does both ways/
Cash comes in either from clients or customers who buy your products or uses your services. If the customers do not pay at the time of its purchase, then some of your cash flow will come from the collections of all accounts receivable. Cash goes out of your business on the other hand in different forms similar to the following:
- Payments for expenses
- Monthly loan payments and;
- Payments for taxes and several accounts payable
Cash Flow Assistance during Covid19 Pandemic
Today, there are several kinds of Covid-19 relief that are offered to small businesses that were impacted by the virus.
For example, the SBA offers the PPP or Paycheck Protection Program, which is a kind of disaster loan that has the capability of giving businesses cash to then pay off its employees. The loan is mainly an incentive for rehiring or keeping employees. The longer the business keeps their employees, the bigger the percentage of the loan is forgiven.
Yet another kind of SBA loan program is the Economic Injury Disaster Loan. With such loan program, businesses can obtain emergency advance of as much as 10,000 dollars while going through the process. if ever you need cash to be able to pay employees, you may just be eligible for Employee Retention tax credit which is set up to encourage businesses that will keep your employees.
You may also take tax credit onto your quarterly employment tax return on form 941.
Real Cash vs. Cash
For some businesses similar to retailers and restaurants, cash is cash – the business that is taking cash from consumers and at times, paying its bills in cash. Cash businesses have this special concern when it comes to monitoring their cash flow, particularly when they might not monitor income unless there are paperwork or invoices.
You may think of cash flow as an image of your business’ checking account in the long run. If there’s more money that’s coming in than what is going out, then you have a positive cash flow and you got enough to cover for your bills. Otherwise, then your financial situation is in danger and may have to think fast how you can resolve it.