Many companies say they “have cash flow,” but in practice they are looking at different things.

Some look at an accounting report.
Others at a spreadsheet built in Excel.
Others simply check the bank balance and make decisions based on that.

The problem is that not all cash flow is useful for management.

One thing is accounting cash flow, which seeks to organize and financially explain what happened over a period.
And something very different is management cash flow, which is used to understand the business’s real cash position, anticipate shortfalls, and make operational decisions.

If this difference is not clear, something fairly common happens: the company believes it has visibility, but in reality it is making decisions with incomplete or outdated information.

What cash flow is

Cash flow is the way to see how money comes in and how money goes out of a company over a given period.

Simply put: it shows where the money comes from and where it goes.

That sounds basic, but it is not that simple. A company can sell a lot, show profitability, and still have cash problems. The opposite can also happen: have a weak month in results, but temporarily healthy cash because of the way it collected or delayed payments.

That is why cash flow is so important: it does not measure only results, it measures liquidity.

And liquidity is what determines whether a company can:

• pay salaries

• meet supplier obligations

• cover taxes

• invest

• finance growth

• avoid mismatches

Why cash flow matters so much in treasury

Treasury lives in the present and the short term.

It is not enough to know whether the business makes money in accounting terms. You also need to know:

• how much cash there is today

• what comes in this week

• what goes out this month

• where tension may arise

• how much real room there is to make decisions

That is where cash flow appears as a central tool.

When it is well built, it allows the company to move from a reactive logic to a forward-looking one.
Instead of putting out fires, the company starts to see the map.

What accounting cash flow is

Accounting cash flow is usually more closely tied to financial reports, closings, and analysis of financial statements.

It normally starts from net income for the period and adjusts items that did not involve actual cash movement, such as depreciation, provisions, or other accounting changes. It also usually organizes flows among operating, investing, and financing activities.

It is useful. Very much so.

It serves to:

• understand the financial performance of a period

• analyze cash generation from a formal perspective

• present information to investors, auditors, or the board

• read the full financial picture with accounting criteria

But it has a major limitation for day-to-day operations:

it does not always reflect how management cash moves at the moment decisions need to be made.

In other words: it may be impeccable as a report, but not necessarily help you answer questions like:

• Can I pay everything next week?

• What happens if this collection is delayed?

• How much cash do I have left after taxes?

• How much can I commit today without creating tension for the month?

What management cash flow is

Management cash flow is an operational and decision-making tool.

It is not primarily designed to close financial statements. It is designed to manage the business’s real cash position.

Its logic is much more practical:

• it starts from real opening balances

• it adds expected or collected income

• it subtracts committed or projected outflows

• it shows cash evolution over time

• it allows you to see shortfalls, surpluses, and mismatches

It is the cash flow a company uses to manage its liquidity.

That is why it is usually built by:

• day

• week

• fortnight

• month

And it is often broken down by:

• bank account

• legal entity

• business unit

• currency

• project

It does not just seek to explain what happened.
It seeks to help you decide what to do.

The difference between accounting cash flow and management cash flow

This is the most important part of the article.

Accounting cash flow:

• looks at the business with financial-accounting criteria

• is usually built on closings and financial statements

• explains cash generation from a formal logic

• is useful for financial analysis and reporting

Management cash flow:

• looks at the business’s operating liquidity

• is built with real and projected movements

• is used to make day-to-day decisions

• helps anticipate cash tensions

The difference is not which one is right and which one is wrong.

The difference is what each one is for.

My blunt opinion:
if a company uses only accounting cash flow to manage treasury, it arrives late.
And if it uses only a management spreadsheet without criteria or structure, it becomes disorganized anyway.

Both views can coexist. But they should not be mixed.

How to build a management cash flow

Here is the practical point.

A management cash flow does not need to be complex to be useful.
But it does need to be well thought out.

1. Define the analysis horizon

First you need to decide which window you want to look at.

The most common options are:

• 13 weeks, if you want a strong focus on short-term liquidity

• 3 months, if you want a tactical view

• 6 to 12 months, if you want to complement planning

For treasury, the 13-week format is usually very powerful because it forces you to look at cash with discipline and anticipation.

2. Start with a real opening balance

Do not start from an “approximate” number.

Management cash flow must start from the real available cash:

• banks

• wallets

• physical cash, if applicable

• balances by currency

• balances by legal entity, if relevant

This point is key, because if the starting point is already wrong, everything else is contaminated.

3. Separate income and expenses by category

Then you need to structure the flows.

Income

• customer collections

• advances

• loans received

• partner contributions

• recoveries

• financial returns

Expenses

• suppliers

• salaries

• social security contributions

• taxes

• rent

• utilities

• financial debt

• investments

• withdrawals or dividends

The more organized the categories are, the more useful the analysis becomes.

4. Differentiate between actual, committed, and projected

This point makes all the difference.

A good management cash flow does not mix everything as if it had the same level of certainty.

It is advisable to distinguish:

• actual: it already happened

• committed: it has a high probability or a defined date

• projected: estimated based on expected behavior

That lets you better read the risk of each week or month.

5. Break it down by the dimension you need to manage

Not every company needs the same level of detail.

You can break it down by:

• bank account

• currency

• legal entity

• business unit

• branch

• project

If you operate in multiple currencies or with multiple legal entities, not doing this breakdown is almost like condemning yourself to looking at cash incorrectly.

6. Calculate the ending balance for each period

The basic logic is:

Opening balance + income - expenses = ending balance

And that ending balance becomes the opening balance for the next period.

It seems obvious, but the power is in seeing that sequence over time.
That is where cash troughs, peaks, tight weeks, and surpluses appear.

7. Compare forecast vs. actual

A management cash flow should not remain frozen.

The value is in updating it and comparing:

• what you expected to collect

• what you actually collected

• which payments were delayed

• where variances occurred

• which pattern repeats

That learning greatly improves the quality of future projections.

What common mistakes appear when building a management cash flow

There are several classic mistakes.

Confusing cash with profit

A company can sell well and still be squeezed dry.

Looking only at the bank balance

The balance is a snapshot. Cash flow is the movie.

Not including taxes or salaries correctly

They are often underestimated or poorly scheduled.

Mixing extraordinary flows with operating ones

That distorts the reading of the business.

Not updating it regularly

An old cash flow gives false peace of mind.

Having one spreadsheet for everything without breakdowns

When the business is complex, that breaks down quickly.

What a simple management cash flow should look like

At a structure level, it could look like this:

• period

• opening balance

• operating income

• non-operating income

• operating expenses

• non-operating expenses

• net balance for the period

• ending balance

And then add breakdowns as needed:

• by bank

• by currency

• by legal entity

• by project

What matters is not that it has a thousand rows.
What matters is that it lets you answer quickly:

How am I today, and how will I be if what I expect actually happens?

When Excel starts to fall short

Excel is still useful. Very useful.

The problem appears when:

• there are multiple bank accounts

• there are multiple currencies

• there are multiple legal entities

• the forecast changes all the time

• movements have to be reconciled manually

• the team spends hours updating instead of analyzing

At that point, cash flow stops being a management tool and becomes an operational burden.

And that is exactly the moment when a company needs a more modern treasury layer.

What this has to do with Fonder

Fonder aims to solve precisely that problem: making the company build cash visibility by hand, between banks, ERP, and spreadsheets, is no longer necessary.

When management cash flow is well built and connected to real operations, the team can:

• see its consolidated liquidity

• anticipate mismatches

• update projections faster

• make decisions with less friction

• spend less time on manual tasks

Because in the end, the value of cash flow is not in having a pretty spreadsheet.

It is in making better decisions with cash.