Cash Flow

What is Cash Flow?

Cash Flow is the net amount of cash and cash equivalents being transferred into and out of a business. In SaaS, positive cash flow is often achieved through upfront annual payments, even if the revenue is recognized monthly over the contract term.

Why It Matters

• It ensures the company has enough liquidity to meet its short-term obligations and payroll.

• Positive cash flow allows a business to reinvest in growth without relying solely on external financing.

• It provides a more immediate view of financial health than accounting profit, which can be affected by non-cash items.