When determining your company’s financial health and profitability, there are more factors to consider than total earnings. Operating cash flow, or OCF, can be just as important—it measures the actual cash your business generates from the sale of a product or service, after deducting operating costs.
Make $100,000 in sales last month? That’s what you’ll record on your income statement as revenue. But what if you’ve only been paid for half of those sales? Last month’s sales dollars will be on the books as $50,000.
Then, some items (like depreciation of supplies) count as a net expense. So it’s possible for your business to have a net loss, but positive cash flow. Want a more accurate view of your business’s financials? Make sure you’re looking at operating cash flow.
Ready to maximize your cash flow?
Contact your local Truist banker for more information on business solutions, or visit Truist.com.