Episode 3: Leveraging QuickBooks for Effective Cash Flow Management

Episode 3: Leveraging QuickBooks for Effective Cash Flow Management

In this episode of QuickBooks Mastery for Small Business Success, father-daughter team Erica Northrup and Lee Davisunpack one of the most critical pieces of small business financial management: cash flow.

Even profitable businesses can fail if they run out of cash. Erica and Lee explain the difference between profit and cash flow, why so many business owners look at their QuickBooks reports and think, “I should have more money in the bank than this,” and how to use QuickBooks as a practical tool to understand where your cash is going.

They walk through cash flow fundamentals, how to think in terms of money in vs. money out, and how to use key QuickBooks tools like the cash flow statement, profit and loss, balance sheet, comparative reports, dashboards, accounts receivable aging, and accounts payable to get a clearer picture of your financial reality.

You’ll also hear real-world examples of overspending, impulse buying, using credit cards, and relying on lines of credit—and how to use cash flow forecasting to make better decisions, set realistic goals, and avoid running your business into a cash crunch.

Listeners will walk away with a better understanding of cash flow, plus simple, actionable steps to track it, improve it, and plan for the future using QuickBooks.

Key Takeaways

• Cash flow is money in and money out, not just profit on a report. You can show a profit and still run out of money.
• You must look beyond your bank balance and consider loans, credit cards, accounts payable, and upcoming obligations when evaluating cash flow.
• QuickBooks offers powerful tools—cash flow statements, profit and loss, balance sheets, comparative reports, dashboards, and aging reports—to help you understand and monitor cash flow.
• Overspending, impulse buying, and stocking up “because it’s on sale” can quietly destroy cash flow and push you into unnecessary debt.
• A cash flow forecast helps you anticipate slow seasons, plan for lean months, and adjust expenses, staffing, and investments ahead of time.
• A good banking relationship and a well-managed line of credit can be critical tools for navigating ups and downs—but only if used wisely.
• Simple habits—timely invoicing, clear payment expectations, using QuickBooks Payments, following up on overdue invoices, and scheduling regular financial review time—can dramatically improve cash flow.

Questions to Reflect On

• Do you know how much cash you truly need each month to cover loan payments, rent, payroll, and your own pay?
• Have you ever looked at your QuickBooks profit and thought, “Where did the money go?”
• Are you making spending decisions based on cash flow, or impulse and convenience?
• When was the last time you looked at your cash flow statement, accounts receivable aging, or cash flow forecastin QuickBooks?
• What is one small habit you could implement this week to better track or improve your cash flow?

Mentioned in This Episode

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