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What is cash flow? Why profitable businesses still run out of money

By SendPay Business · · 2 min read

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Cash flow is the money moving in and out of a business over a period of time. A business can be profitable on paper and still run short of cash if customers pay late while bills, wages and rent are due now.

Cash flow vs profit

Profit is what's left once costs are taken from sales, whenever the money actually arrives. Cash flow is about timing: whether the money is in the account on the day you need to pay out.

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Common causes of gaps

  • Customers paying 30, 60 or 90 days after the invoice.
  • Buying stock up front before it sells.
  • Seasonal dips in sales.
  • Big one-off bills, such as tax or equipment.

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Ways to get paid faster

Invoice as soon as the work is done, set clear payment terms, and make paying easy with a link the customer can pay by card. Taking deposits up front and sending polite reminders on the due date also help.

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Where SendPay fits

SendPay platforms let your customers send invoices, payment links and subscriptions and take the money into GBP, EUR and USD accounts, under your own brand and powered by licensed partners.

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How it works

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Why sign up

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It's all about creating your own financial platform with ease. Start with a free account today.

  • A free business accountOpen it in about a minute with your business name, email, password and mobile. No card and no documents to start.
  • Get paid from day oneTake card payments, and share your own payment link and invoices so customers pay in a click.
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SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.

Questions people ask

How long will my cash last?

Enter your cash, what comes in and goes out each month, and the free calculator shows your cash flow, how many months your cash lasts and your balance for the next year.

Cash flow calculator →
What are invoice payment terms?

When and how an invoice should be paid.

Payment terms explained →
Can I charge interest on late payments?

In the UK, businesses usually can.

Late payment interest →
Should I send a payment link or an invoice?

It depends on the sale.

Payment link vs invoice →

Read next

Spotted a mistake or something out of date? and we'll fix it. How our guides are made

This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.