Net Monthly Cash Flow
It is whether more cash came into your accounts than left this month — the bank balance story, not the P&L story.
Formal definition
Net monthly cash flow equals total cash deposits minus total cash withdrawals in the month.
Why it matters
Profitable businesses still fail when cash flow is negative — payroll and vendors need cash, not accrual profit.
Where you see it
- Bank statements and cash summaries
- 13-week cash-flow forecasts
- Turnaround advisory work
- Small business coaching
- Treasury management basics
Worked example
- Deposits this month: $42,000.
- Withdrawals this month: $38,500.
- Net monthly cash flow = $42,000 − $38,500 = $3,500.
- Interpretation: Cash increased by $3,500 this month.
How Business metrics calculates it
Money in this month − Money out this month.
Where people fool themselves
Net cash flow that includes a loan draw looks like a great month. Separate financing inflows in your own head even if they hit the same account.
Run it on your own numbers: any industry calculator.