Understanding Cash Flow In Music
HOW CASH FLOW IS LIKE RHYTHM
Rhythm is the way music is systematically divided into beats that repeat a specific number of times within a bar at a collectively understood speed or tempo.
Rhythm is how musicians connect and play with one another. At least, that's the definition you would get if you asked a metronome. Beats change from one composition to the next and cash flow changes from one month to the next. Beats may change multiple times before you finalize your composition and every composition can be remixed. Cash flow works in precisely the same way.
Just like you can change the rhythm in music, you can make proactive and reactive decisions that will impact your cash flow.
**"Cash Flow Is The Difference Or Net Changes In Cash Between Current And Previous Period" **
To understand what is happening with your cash flow requires a focus on those net changes and their impacts.
There are a handful of drivers that cause changes in your business’s cash flow rhythm for any period or month. These drivers are just like the beats in rhythm, they can change—but they repeat. As these components change, your cash flow changes. Such beats or components include your:
- Accounts Receivable
- Accounts Payable
- Note’s Payable
- Profit & Loss
Which is why Profit & Loss Does Not Equal To Cash Flow.
Let me help you shine the light on what's really going on with your most precious asset - cash.
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