A simple example
If A$5,000 comes in during a month and A$4,400 goes out, the net cash inflow is A$600. A large bill due before income arrives can still create a short-term cash shortage.
What to keep in your records
Use a clearly labelled period and distinguish actual payments from estimates. For a household view, avoid treating transfers between your own accounts as new income.
A common mix-up
Positive cash flow is not the same as high net worth. A person can own valuable assets yet have little cash available for this month’s bills. Read ASIC Moneysmart’s explanation.
