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Why You Must Focus On Cash Flow over Profits during COVID-19

With the pandemic wreaking havoc throughout the world, many economies have been severely affected. Travel restrictions and lockdowns have slowed down and even halted many of our daily activities. This is horrible news for businesses that rely on face-to-face contact to carry out services or sell products, and many companies that were not prepared for such changes have been forced to reduce operations or even close down completely.

If your business is still running even during the pandemic or you are planning to start one, one of the most important factors that can affect your success is your ability to manage your money. Cash flow management is something you have to focus on—even more so than profit—if you hope to survive and thrive during the pandemic.

What is cash flow management?

Cash flow management is the process in which you control what your money is doing. It is different from budgeting and other financial tasks, though that can be part of the process. Whereas budgeting revolves around setting aside money to do specific tasks, cash flow management involves knowing where the money is actually going.

This is the reason your business must have adequate cash flow management and the reason your accounting and bookkeeping practices must include it. Otherwise, you will have no clue where your money is going and where it is coming from, leading to bad decisions that leave your business in financial peril.

Why must I focus on cash flow over profit?

We are not saying that profit is not important or crucial. It is still an important part of business, because if you cannot make a profit, you cannot survive. However, not every company profits. Some may not see profits until the end of the month, and some even to the end of the year. These types of businesses must take control of their cash flow, ensuring that enough money is moving around the company to keep things running, maximising every dollar.

What must I do to get my cash flowing?

There are many things you can do to get your cash to flow. For instance, you can relocate your business from the physical into the digital world. With so many restrictions offline, going online is perhaps one of the best ways to get money flowing again. Being online helps reduce overhead costs, and it can even increase cash flow as more customers now head online to purchase various items.

Another thing you can do to get your cash flowing is to make sure that the money you still have makes some interest. This can be done in various ways, such as storing them in high-interest business savings accounts. While it may not be much to begin with, the amount will grow over time, especially if you are able to save more and more money. This will lead to more money accessible to the company, improving cash flow overall.


Ensuring that the money you have in your business flows smoothly will help your company survive and thrive during these trying times. If you do need any assistance, such as relief programs, do not be afraid to to learn about and apply for them. Do your research and find out what programs are available to you, and take your time to set up good cash flow management. Pair these two together, and you will see your business through the pandemic and be more than ready to grow again when things get better!

The Ecommerce Accountant is a collective of online business advisors in Australia, helping online stars and influencers to stay on top of finance. If you need e-commerce accounting services to help you improve cash flow management, work with us today!

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