12 Thought-Provoking Cash Flow Quotes and Expressions

Published by ForwardAI on

There is really only one way to address cash flow crunches

Few financial vital signs are as important as cash flow. Some of the best minds in business (and, surprisingly, hip-hop) have coined cash flow quotes musing about keeping an eye on money coming in and going out of a business.

The first modern mention of cash flow dates back to 1863 in the United States and was the first accounting of cash receipts and disbursements of its kind. Since then, business magnates and people from all walks of life have opined on the value of cash flow. The following is a list of some of the best cash flow quotes and sayings.

“Revenue is vanity, profit is sanity, but cash is king.”

The origin of the mythical “cash is king” is unknown. The common consensus is that former Volvo CEO Pehr G. Gyllenhammar first used the expression in 1988 while discussing the global stock market crash of 1987. During that time, companies with ample cash reserves weathered the markets better than those who had poor cash management.

The expanded maxim’s message is clear and concise. Your company’s revenue figures are great to flaunt, but they don’t ultimately mean much if your cash flow is out of whack. Profit offers peace of mind, surely, but it doesn’t indicate that your business financials are sound. Only stable, reliable cash flow can truly demonstrate success.

“A picture’s worth a thousand words.”

This is also a quote with a disputed origin. But, what’s undebatable is how visualizing your cash flow with a tool, like our cash flow forecasting and risk assessment, helps you see your cash flow in an entirely new light. Humankind was not created to manage by spreadsheet alone. In fact, most studies prove that people really are visual learners.

“Money is a terrible master but an excellent servant.”
—P.T. Barnum, founder, Barnum & Bailey Circus, showman and businessman

P.T. Barnum was never afraid to approach the elephant in the room—both literally and metaphorically. Barnum is famous for the circus which bears his name, but he was also a newspaper publisher and world-class huckster. His exploits made him a wealthy man, with an estimated net worth of $8.5 million. Barnum also authored several books, including The Art of Money-Getting, which remains one of the most on-the-nose book titles ever used.

But for all of Barnum’s escapades, the man knew how to bring in cash. He also knew that cash is best used as a tool to fuel growth and new business, rather than the end goal alone. Cash flow operates in much the same way for today’s entrepreneurs. You should rely on cash flow to serve your needs, but never let it be the sole ringmaster controlling your fortune.

“Never take your eyes off the cash flow because it’s the lifeblood of business.”
—Sir Richard Branson, business magnate, investor, author and philanthropist

Richard Branson knew he wanted to be an entrepreneur from an early age. He began his first business, a mail-order record business, at the age of 17. He then went on to open the Virgin Records chain in 1972, an airline in 1984, a train system in 1993, and a space tourism business in 2004. If anyone knows how to juggle business development with cash flow analysis, it’s likely the man who started off with a magazine and may one day end up in outer space.

Branson’s aspirations likely would not have taken off were it not for a steadfast control of his companies’ cash flow. New business may come and go, but cash flow dictates whether or not you’ll be in operation long enough to see them come to fruition. Companies cannot thrive, let alone exist, without positive cash flow.

“Cash rules everything around me. C.R.E.A.M. get the money— dollar dollar bill, yo.”
—Wu-Tang Clan

The Wu-Tang Clan are perhaps known more for their genre-defining art than their financial acumen. But C.R.E.A.M. remains as salient today as it did when the song (and acronym) first dropped on Enter the Wu-Tang (36 Chambers) in 1994. To paraphrase band leader RZA, without positive cash flow, “You [can’t] punch your way out of a wet paper bag with a pair of scissors in your hand.”

Much like the adage that says cash is king, cash should rule everything around your business. Revenue’s important, and so is a solid business model. But everything comes back to cash flow. Protect your neck by keeping an eye on your cash coming in and your money going out.

“If I had to run a company on three measures, those measures would be customer satisfaction, employee satisfaction, and cash flow.”
—Jack Welch, Former General Electric CEO, author and chemical engineer

Jack Welch is one of the wisest business leaders of his generation. He reorganized and rebuilt General Electric (GE) in what became one of the strongest corporate turnarounds in history. Transforming an aging manufacturing giant into a business behemoth, Welch’s management style pushed employees to perform at their best. His vision for GE also strove to increase the company’s market share.

But cash flow sits alongside these two tenets of Welch’s business philosophy, signifying just how important it is to keep your company’s capital in good shape. Without happy customers and employees, you can’t attract and retain people to fuel your business. And without cash, you won’t have a business to fuel in the first place.

“We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.”
—Michael Dell, founder and CEO, Dell Technologies

In 1984, Michael Dell started his technology company by building and selling personal computers from his dorm room. He went on to win business by undercutting his competition, mostly because he didn’t have the overhead costs that come with retail operations. Dell started his business by focusing on profit and loss statements, avoiding consumer-facing retail due to low profit margins.

What Dell had to learn about business was that cash flow is the real barometer of a company’s overall health and viability—not profit. Low profit-margin companies can thrive so long as their overhead remains minimal and their sales volume high. Focusing on profits and losses can come at the expense of cash flow management, which means you might find yourself running on empty sooner than you think.

“Money often costs too much.”
—Ralph Waldo Emerson, essayist, lecturer and philosopher

If Emerson were alive today, he’d likely have one of the best Twitter accounts out there. The transcendentalist thinker coined some of the pithiest phrases of his time and wrote extensive treatises on the human condition just as compellingly.

Emerson is also quoted as stating, “Money is of no value; it cannot spend itself. All depends on the skill of the spender.” Both of these insights are applicable to the importance of cash flow. It’s better to monitor your cash flow and borrow wisely. This allows you to use your company’s capital in a skilled, deliberate manner.

“Entrepreneurs believe that profit is what matters most in a new enterprise. But profit is secondary. Cash flow matters most.”
—Peter Drucker, management consultant, educator and author

New entrepreneurs may see profit as a marker of a successful business, but cash flow is what keeps the lights on. This is a more accurate marker of your company’s success in its early stages than the amount of money you bring in, as profit only tells one part of the story.

It’s difficult to keep cash flow in mind when you’re starting a new venture. The demand to generate revenue can overshadow the necessities of money management. But the latter is more important than the former, lest your company spend more than it takes in.

“The more a business owner knows about their cash flow, the more empowered they become.”
—Nick Chandi, ForwardAI CEO

Our very own CEO, Nick Chandi, nicely sums up the importance of knowing your cash flow inside and out. Small and medium-sized enterprises (SMEs) have to pay close attention to where, when, why and how cash moves through their business. Cash flow concerns can get eclipsed by the other daily issues that require an entrepreneur’s attention, however.

In order to look ahead, you have to see where you’ve been. Cash flow forecasting lets you look at the factors affecting your cash flow, like accounts receivable and payable, so that you can see patterns and anticipate or prevent gaps. A risk score, contained within the forecast, also provides a key indicator of financial health and the ability to procure businesses financing when needed.

“There is really only one way to address cash flow crunches, and it’s planning so you can prevent them in advance.”
—Elaine Pofeldt, writer, editor, and author of The Million-Dollar, One Person Business

Pofeldt hits upon a crucial component of financial success: Preparation. Your company may be raking in revenue today, but face a financial downturn tomorrow. The best way to safeguard your business against the ebbs and flows of commerce is by planning ahead and managing cash flow before crises arise.

The first step toward preparation is management. The more you manage cash flow today, the better you can understand your needs in the future. It’s better to invest time and effort now than to pay for inattentiveness in dollars and cents down the line.

“The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality.”
Chris Chocola, American businessman and former politician

There’s any number of metrics out there that business owners can use to benchmark the success of their venture. Some are better than others. Income statements and balance sheets often tell an incomplete picture at best, and an inaccurate one at worst. It’s easier to spin these figures in a positive manner, whereas cash flow statements provide an unvarnished glimpse into your company’s overall health.

Cash flow, therefore, is the best way to track your company’s performance and viability. If you are able to keep a close watch on cash flow, you can then project whether your income is sustainable for growth and if your balance sheets accurately account for your assets and liabilities.

No matter which of these cash flow quotes and sayings most resonates with you, the most important takeaway is the virtue of maintaining a clear and accurate picture of your company’s financial decisions.

ForwardAI helps you keep track of your business’s current cash flow and future projections will deep insights. And with that information, you can make more informed decisions about your company’s future.

Signing up is simple. ForwardAI integrates directly with QuickBooks Online and you can connect your account with just one click.

Improve your cash flow instantly, so you don’t have to worry about it 24/7. Forwardly simplifies cash flow management, so you can do it all from one place. Amplify your business cash flow and bring certainty to your business’s future. Sign up now for free.

The information in this article is not financial advice and does not replace the expertise that comes from working with an accountant, bookkeeper or financial professional.


Image: GraphicStock.

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