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5 Reasons Why Cash Flow Is Important To Small Business

by: Anna Beam, Vice President | Associate Marketing Director

Jun 14th, 2022

Business Tips

5 Reasons Why Cash Flow Is Important To Small Businesses

Everyone knows that money is important in business, but how about the specifics? Here are 5 reasons why cash flow is so important to small businesses.

When it comes to cash, the obvious takeaway is that money in is good, money out is not so good, but there is also a lot more to it than that. Business financials typically come in the forms of a profit and loss statement, a cash flow statement, and a balance sheet. All three are important pieces of the monetary puzzle, but a cash flow statement is arguably the most important. When it comes to small business cash flow, the importance can’t be understated. A cash flow statement gives a clear picture of the money actually coming in and out of a business, and measures whether the money generated is higher than the money dispersed. Here are five reasons why cash flow is important to small business:


Your cash flow statement will give you the most clear picture of how your business is doing. While a profit and loss statement is also an important piece of the puzzle, the more frequent cash flow statement will show you where you are at any specific point in time.


Positive cash flow leads to a more stable business model, making it possible to pay suppliers and other expenses on time. Beyond a professional reputation, you will avoid late fees and other penalties that would negatively impact your business.


Having available cash on hand to use toward expansion can help you avoid high interest loans and streamline the process toward growth. This could include hiring new employees, upgrading equipment or making new additions. Additionally, showing good business cash flow is a good sign for future financing opportunities.


If an opportunity presents itself to improve your business, knowing your cash flow situation can help you make quicker, more self-assured decisions.

Experts Improve Success Rate

It’s imperative to know how your business tracks at all times to lay the foundation for success. Of course, a positive cash flow is the ideal goal, but knowing where your money comes from and where it goes is the key to short and long term business planning.

All financial statements are a vital picture of your business, but maintaining accurate cash flow statements will keep you more sufficiently in sync with the health of the business.

To give you a comprehensive look at your finances while optimizing cash flow, Hillcrest Bank offers many benefits of small business banking, including small business treasury management solutions, merchant services, and more to meet your company’s specific needs.

Through hands-on implementation of our processes and programs, we will guide you through all the important steps needed to run your business efficiently.

Available 24/7 for online customer support, our treasury management specialists offer the following:

  • Remote and Mobile Check Deposits
  • Lockbox servicing
  • Merchant Card Processing
  • Automatic Clearing House
  • Wire Transfers
  • Positive Pay/Account Reconciliation
  • ACH Positive Pay


Between cash flow optimization, receivables, disbursements, fraud control, and more, our specialists at Hillcrest Bank are dedicated to supporting your small business financial needs.

Please contact one of our treasury management specialists to learn more or find out how to get started today.

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