Cash inflows are the funds that come into a business or personal account, boosting the cash that's readily available. Any source of cash that adds to what's already accessible counts as an inflow, whether it's payments from customers, funds from a loan, or returns on an investment. Without a steady flow of cash coming in, even the best-laid plans can encounter an obstacle. Among small and mid-sized businesses (SMBs), 60% cite cash flow management as a major challenge.

Below, we'll explain what businesses need to know about cash inflow and how they can work with it.

What's in this article?

• What qualifies as a cash inflow?
  
• How do cash inflows differ from revenue?
  
• Why are cash inflows important to track?
  
• Does Stripe help track cash inflows?
  

What qualifies as a cash inflow?

Cash inflows are any monetary receipts that increase the available cash within a business or an individual's accounts. Cash inflows might be received directly (e.g. cash sales) or after a credit period (e.g. accounts receivable). All cash inflows impact a business's liquidity, improving its ability to meet obligations.

Main types of cash inflows

Cash inflows typically arise from three main categories of activities: operating activities, investing activities, and financing activities.

Operating activities

Cash inflows from operating activities reflect the core business operations. These include:

• Sales revenue: Payments received for products or services provided to customers

• Accounts receivable collections: Cash collected from customers who previously purchased on credit

• Other income: Royalties, licensing fees, or nonrecurring operational revenue

• Tax refunds: Funds from overpaying taxes or qualifying for a rebate

Investing activities

Investing-related cash inflows occur when you allocate resources to long-term assets and receive returns or liquidate holdings. These include:

• Sale of assets: Proceeds from selling equipment, property, or other fixed assets

• Investment returns: Interest income, dividends, or gains from the sale of financial investments

• Loan repayment: Any repayment of money that has been loaned

Financing activities

Financing cash inflows relate to capital raised or borrowed to fund operations or growth. These include:

• Equity financing: Money received from investors through issuing stock or ownership shares

• Debt financing: Proceeds from loans, bonds, or other borrowing arrangements

• Contributions from owners: Additional capital injections from shareholders or business owners

Miscellaneous or one-time sources

Sometimes, cash inflow can also come in from unexpected or occasional sources, such as:

• Grants or subsidies: Financial support from governments or organisations

• Insurance payouts: Settlements from claims or damages

• Legal settlements: Cash from lawsuits or negotiated agreements

• Currency gains: Extra earnings from favourable changes in exchange rates

• Donations or sponsorships: Support from external parties for specific projects or goals

How do cash inflows differ from revenue?

Cash inflows and revenue both involve money coming into a business, but they're distinct concepts with different meanings and roles in financial management. Cash inflows measure money movement, while revenue measures earning activity. Cash inflows impact liquidity, while revenue impacts profitability.

Here's a closer look at how they differ.

Cash inflows

Cash inflows refer to any money that enters your business. They come from a variety of activities, such as customer payments, borrowed funds, proceeds from selling assets, investment income, and grants or subsidies. Cash inflows focus on actual cash transactions. For instance, even if you receive a loan, that's considered a cash inflow because money enters your account. Similarly, cash inflows are tied to when the money is received, so collecting on an invoice contributes to cash inflows, but it doesn’t create new revenue.

Cash inflows appear on the cash flow statement, and they impact liquidity and short-term financial health. They show how much cash you have available to pay expenses and invest in the business.

Revenue

Revenue specifically represents the earnings from your core business activities, such as selling products or services or collecting fees from subscriptions or licensing. It’s often referred to as "sales" or "turnover", and it appears at the top of your income statement. From an accounting perspective, revenue is recorded when it’s earned – not necessarily when cash is received. For example, if you sell goods on credit, the revenue is recognised at the time of sale, even if payment comes later.

Revenue shows up on the income statement, and it reflects operational success over a period. It's used to assess profitability, but it doesn't always indicate liquidity.

Practical example

Let’s say a business sells £10,000 worth of goods on credit in January, and the customer pays for the order in February. The business would record £10,000 in revenue in January, at the time of the sale, and it would record £10,000 in cash inflows in February when the customer pays.

Why are cash inflows important to track?

Tracking cash inflows is key for keeping your business financially healthy. For example, let’s say that you expect £100,000 in revenue this month, but only £50,000 actually lands in your account due to late payments. By tracking inflows, you can quickly see the gap, chase the overdue payments, and adjust your spending if needed to stay afloat.

Here are the kinds of operational efficiencies you can improve by tracking cash inflows.

Meeting financial obligations

Cash inflows are what you rely on to pay bills, salaries, suppliers, and everything else that keeps your business running. Even if your business is profitable on paper, a lack of cash coming in at the right time can cause significant trouble. Sufficient cash inflow allows you to manage inventory, meet payroll, and avoid the stress of balancing late payments.

Planning growth trajectory

Knowing how and when cash is coming in lets you plan confidently for growth. You can time big moves – such as buying equipment or expanding your team – without risking a stress on available cash.

Monitoring business performance

Cash inflows provide a reality check on your business performance. For instance:

• A strong inflow from customers shows good sales and timely payments.

• Too much reliance on loans or asset sales could hint at underlying revenue issues.

Tracking cash inflows is a way to measure how healthy and self-sustaining your business is. Investors, lenders, and partners will also want to see that your business has steady, reliable cash flow.

Understanding financial trends

Paying attention to inflows over time can highlight patterns. As you observe these, you can ask questions, such as:

• Are customers paying faster or slower than before?

• Are you depending too much on one-time cash boosts such as loans or grants?

• Are there specific areas where you're succeeding more than expected?

Understanding these trends helps you spot potential problems or opportunities early. This knowledge can help you prepare for risks such as a slow sales month or unexpected expenses, allowing you to plan and build up reserves for tougher times.

Does Stripe help track cash inflows?

Stripe makes it easy to track cash inflows by giving businesses a clear, real-time view of their incoming payments. The Stripe Dashboard provides an overview of all transactions as they happen – payments, refunds, and transfers. This view can help show exactly what's coming in and when.

Additionally, Stripe has reporting tools that break down your transaction data, so you can see the details of every payment: what came in, what's pending, and how much went to fees. You can filter reports by specific time frames to analyse trends or plan ahead, and Stripe analytics can further dig into your revenue trends, payment methods, and customer behaviour.

Stripe can also help with accounting records. It can integrate with accounting software such as QuickBooks or Xero, via apps from the Stripe App Marketplace, to automatically sync transaction data and keep your records accurate and up-to-date.