Profit Is illusory, Cash Flow Never Is
Profit will neither guarantee the business's development nor its survival.
More businesses fail for lack of cash than for want of profit.
True profit generates cash. If a business is truly operating profitably, then it will generate cash surpluses. It's essential, therefore, to manage cash flow so as to avoid cash flow gaps.
When net cash flow is added to or subtracted from opening bank balances, any likely, short-term funding requirements are apparent.
A 12 month flow plan is essential for reliable, regular cash flow projections and will take into account seasonal effects on a business.
When companies lack an effective cash flow plan, they may in reality be trading whilst insolvent, which is against the law.