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

  1. Deposits this month: $42,000.
  2. Withdrawals this month: $38,500.
  3. Net monthly cash flow = $42,000 − $38,500 = $3,500.
  4. 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.