cash flow outflows

what are outflows

are the money going out of the business for various purposes

what are examples of outflows

• cash purchases

• credit purchases

• rent

• rates

• salaries

• wages

• utilities

• purchase of assets

• Value Added Tax (VAT)

• bank interest paid

cash purchases

items purchased by a business and paid for at the time of purchase

credit purchases 

items purchased by a business and paid for at a later point in time

purchase of assets

non-current assets that a business is likely to keep for more than one year such as machinery and vehicles

value added tax

businesses that are VAT registered must pay VAT to HM Revenue & Customs (HMRC), and this should be shown in the cash flow forecast