Cash Flow Glossary

Burn Rate

The rate at which a business spends its cash reserves in excess of revenue generated, typically expressed as a monthly figure and used to calculate how long existing cash will last.

Cash Flow

The net movement of money into and out of a business over a specific period, reflecting the actual cash received from clients and paid to vendors, suppliers, and operating expenses.

Cash Flow Forecast

A financial projection estimating future cash inflows (expected payments from clients) and outflows (planned expenses) over a specific period, used to anticipate cash shortfalls or surpluses.

Days Sales Outstanding

A metric measuring the average number of days it takes a business to collect payment after issuing an invoice, used to assess the efficiency of accounts receivable management.

Invoice Financing

A form of short-term borrowing where a business uses unpaid invoices as collateral to receive immediate cash from a lender, repaying the advance plus fees when the client pays.

Liquidity

The ease and speed with which assets can be converted to cash to meet financial obligations, and more broadly, a measure of a business's ability to cover its short-term liabilities.

Payment Processing

The system and services that facilitate the transfer of money from a payer (client) to a payee (business) for invoice settlement, including credit/debit card networks, ACH bank transfers, and digital payment platforms.

Working Capital

The difference between a business's current assets (cash, receivables, inventory) and current liabilities (accounts payable, short-term debt) — a measure of short-term financial health and operational liquidity.