Cash flow is very important for a business. It works like a wave that helps the business run smoothly. A cash flow report helps business owners make smart choices before the money runs out. It shows where to focus to bring in more cash. Cash flow tells how money moves in and out of the business, while profit only shows how well the business is doing. In the UAE, businesses that are registered for VAT must charge VAT on the things they sell and pay that money to the FTA. The tax they pay depends on the input VAT and output VAT. VAT can affect how much cash a company has, and this depends on how much money the company makes. It’s not always easy to compare VAT and cash flow because cash flow looks at a certain time period. Cash flow statements show how much money the company really has. These statements help businesses decide about investments and loans. They should not be ignored because they explain how money is earned and spent. Cash flow also shows liquidity, which means how quickly a business can turn things like products or money owed by customers into real cash. A good plan to collect money on time helps the business have extra cash for investing. Liquidity also shows investors and lenders if the business is strong and ready for any problem. Checking liquidity often helps the business make smart choices, grow, and earn more. Mubarak Al Ketbi helps you take care of all this with expert advice.
