Cash Flow English

Learn to Talk About Cash Flow in English

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What Is Cash Flow?

Cash flow is the movement of money into and out of a business.

Money coming into a company is called a cash inflow. Money leaving a company is called a cash outflow.

A company normally receives money from customers. It spends money on salaries, suppliers, rent, taxes, equipment and other costs.

Positive cash flow means that more money is coming into the business than leaving it. Negative cash flow means that more money is leaving the business than coming in.

A Simple Example

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Key Cash Flow Vocabulary

English	German	Simple explanation
cash flow	Cashflow / Geldfluss	Money moving into and out of a business.
cash inflow	Geldzufluss / Zahlungseingang	Money coming into a company.
cash outflow	Geldabfluss / Zahlungsausgang	Money leaving a company.
positive cash flow	positiver Cashflow	More money comes in than goes out.
negative cash flow	negativer Cashflow	More money goes out than comes in.
cash balance	Kassenbestand / Bankguthaben	The amount of cash available at a particular time.
cash-flow forecast	Cashflow-Prognose	An estimate of future cash inflows and outflows.
cash shortage	Liquiditätsengpass	A situation in which a company does not have enough cash.
operating expenses	Betriebsausgaben	The everyday costs of running a business.
overhead costs	Gemeinkosten / Fixkosten	General business costs not directly linked to production.
outstanding invoice	offene Rechnung	An invoice that has not yet been paid.
payment delay	Zahlungsverzögerung	A delay between the due date and the actual payment.
emergency funding	Notfinanzierung	Money arranged quickly to solve an urgent financial problem.
credit facility	Kreditlinie	An agreed amount of credit available from a bank.
to preserve cash	Liquidität erhalten	To avoid unnecessary spending and keep cash available.

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Useful Business English Expressions

We need to improve our cash flow.
(Wir müssen unseren Cashflow verbessern.)

Our cash inflows are lower than expected.
(Unsere Zahlungseingänge sind niedriger als erwartet.)

Our cash outflows have increased this quarter.
(Unsere Zahlungsausgänge sind in diesem Quartal gestiegen.)

Several customers have not paid their invoices yet.
(Mehrere Kunden haben ihre Rechnungen noch nicht bezahlt.)

We may experience a temporary cash shortage.
(Wir könnten einen vorübergehenden Liquiditätsengpass erleben.)

We need a reliable cash-flow forecast.
(Wir brauchen eine zuverlässige Cashflow-Prognose.)

We should reduce unnecessary expenditure.
(Wir sollten unnötige Ausgaben reduzieren.)

We need to collect outstanding invoices more quickly.
(Wir müssen offene Rechnungen schneller einziehen.)

The bank has increased our credit facility.
(Die Bank hat unsere Kreditlinie erhöht.)

We must preserve cash until sales improve.
(Wir müssen unsere Liquidität erhalten, bis sich die Verkäufe verbessern.)

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Mini Reading: A Temporary Cash-Flow Problem

Daniel is the finance director of a growing engineering company. The company has received several large orders from new customers.

The orders are profitable, but the company must buy materials and pay production costs before the customers pay their invoices.

Most customers have payment terms of sixty days. However, many suppliers must be paid within thirty days.

Daniel’s cash-flow forecast shows that the company may have a cash shortage next month. The shortage will probably last for three or four weeks.

Daniel is considering several solutions. He wants to ask some customers for advance payments. He is also discussing a temporary credit facility with the company’s bank.

In addition, the company will delay some non-essential purchases until the cash position improves.

True or False: Daniel’s Company

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Business Dialogue: Managing a Cash Shortage

True or False: The Business Dialogue

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Discussion Questions

1. Why can a profitable company experience cash-flow problems?
2. What are the main cash inflows in a typical business?
3. What are the most important cash outflows?
4. How can a company encourage customers to pay earlier?
5. When should a company prepare a cash-flow forecast?
6. Which expenses can a company postpone during a cash shortage?
7. What are the advantages and risks of using a credit facility?
8. Should companies offer discounts for advance payments?

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Grammar in Context

1. Present Perfect

Our cash outflows have increased this quarter.
(Unsere Zahlungsausgänge sind in diesem Quartal gestiegen.)

Several customers have delayed their payments.
(Mehrere Kunden haben ihre Zahlungen verzögert.)

2. Modal Verbs

We should reduce unnecessary expenditure.
(Wir sollten unnötige Ausgaben reduzieren.)

We could ask the bank for additional credit.
(Wir könnten die Bank um einen zusätzlichen Kredit bitten.)

3. First Conditional

If customers pay earlier, our cash position will improve.
(Wenn die Kunden früher zahlen, wird sich unsere Liquiditätslage verbessern.)

If we delay the purchase, we will preserve more cash.
(Wenn wir den Kauf verschieben, werden wir mehr Liquidität erhalten.)

4. Passive Voice

Several payments have been delayed.
(Mehrere Zahlungen wurden verzögert.)

The forecast is updated every week.
(Die Prognose wird jede Woche aktualisiert.)

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Common Mistakes Made by German Speakers

❌ We have a negative cashflow situation since two months.
✔ We have had a negative cash-flow situation for two months.

❌ The customer has not paid until now.
✔ The customer has not paid yet.

❌ We need more liquid money.
✔ We need more cash.

❌ We must make a cash-flow planning.
✔ We must prepare a cash-flow forecast.

❌ The bank gives us a credit line.
✔ The bank provides us with a credit facility.

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Complete the Sentences

Choose the correct answer. Only one answer is correct.

Score: 0/10

No.	Sentence	A	B
1	Cash flow is the movement of money ______ a business.	into and out of	between and under
2	Money coming into a company is called a cash ______.	outflow	inflow
3	Several customers have not paid their invoices ______.	already	yet
4	We need to collect outstanding invoices more ______.	quickly	quick
5	The company may experience a temporary cash ______.	short	shortage
6	The bank has increased our credit ______.	facility	furniture
7	A cash-flow forecast helps the company ______ ahead.	plan	planning
8	If customers pay earlier, our cash position ______ improve.	would	will
9	We should reduce unnecessary ______.	expend	expenditure
10	We must preserve cash ______ sales improve.	until	during

Start Again

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Cash Flow Vocabulary Test 1

Choose the correct definition.

Score: 0/10

No.	Word	A	B	C	D
1	Cash flow	The value of company buildings	The movement of money into and out of a business	The number of products sold	The total number of employees
2	Cash inflow	Money coming into a company	Money paid to suppliers	Money invested in buildings	Money lost through theft
3	Cash outflow	Money received from customers	An increase in sales	Money leaving a company	A reduction in prices
4	Cash balance	A comparison between two products	A list of outstanding invoices	A company’s annual profit	The amount of cash currently available
5	Cash shortage	A period when a company does not have enough cash	A fall in the number of employees	An increase in inventory	A reduction in tax
6	Cash-flow forecast	A report about past employees	An estimate of future cash movements	A list of company products	A legal contract with a supplier
7	Outstanding invoice	A cancelled invoice	A corrected invoice	An invoice that has not yet been paid	An invoice paid twice
8	Operating expenses	The everyday costs of running a business	Money received from investors	The total value of a company	Money held by customers
9	Credit facility	A company training centre	A customer complaint system	A supplier discount	An agreed amount of available bank credit
10	To preserve cash	To avoid unnecessary spending	To increase salaries immediately	To buy more inventory	To cancel customer invoices

Start Again

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Cash Flow Vocabulary Test 2

Choose the correct meaning or business expression.

Score: 0/10

No.	Word or phrase	A	B	C	D
1	Positive cash flow	Costs are higher than income	The company has no customers	More money comes in than goes out	All invoices are unpaid
2	Negative cash flow	Sales are always profitable	More money goes out than comes in	The company has no costs	Customers pay early
3	Payment delay	A payment made before the invoice is issued	A reduction in the invoice amount	A payment in another currency	A payment made later than expected
4	Emergency funding	Money arranged quickly for an urgent problem	Money spent on employee holidays	Money invested for thirty years	Money paid as a bonus
5	Advance payment	Payment after delivery	Payment before goods or services are completed	Payment after the due date	Payment to an employee
6	Overhead costs	Money received from customers	The cost of raw materials only	General costs of running a business	The value of company shares
7	To postpone expenditure	To spend twice as much money	To pay an invoice immediately	To cancel every future purchase	To delay spending until a later time
8	To update a forecast	To revise it using new information	To delete all financial information	To send it to a customer	To translate it into another language
9	To collect an invoice	To print an invoice	To receive the money owed	To cancel an invoice	To send goods back
10	To improve the cash position	To reduce the number of customers	To increase warehouse space	To increase the cash available to the company	To increase unnecessary expenditure

Start Again

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Speaking Activity

Imagine that your company expects a cash shortage next month. Discuss the following possible solutions:

1. Ask customers to pay earlier.
2. Request advance payments.
3. Delay non-essential purchases.
4. Negotiate longer supplier payment terms.
5. Use a bank credit facility.
6. Reduce inventory.

Use these expressions:

I think we should …
(Ich denke, wir sollten …)

Another possibility would be to …
(Eine weitere Möglichkeit wäre, …)

The main advantage is that …
(Der Hauptvorteil besteht darin, dass …)

The main risk is that …
(Das Hauptrisiko besteht darin, dass …)

Continue Learning

Related finance topics:

• Working Capital English
• Liquidity English
• Accounts Receivable English
• Accounts Payable English
• Cash-Flow Forecasting English
• Short-Term Financing English
• Trade Finance English
• Finetrading English