Managing a restaurant's cash flow: why you can be profitable and still run out of cash
Your profit report may show a profit while your till is empty, because profit is not cash: stock you bought, receivables not collected, and rent due next week. Managing cash flow means knowing where the money is and when it leaves.
A weekly cash-flow table
Each week, write what comes in and what goes out:
| Comes in | Goes out |
|---|---|
| Cash and card sales (settled later) | Supplier purchases due |
| Collections from customer receivables | Salaries and wages |
| Any other income | Rent and utilities |
| Tax due and instalments |
Habits that protect your cash
Bank cash daily and never pay suppliers from the till without recording it. Buy what you need weekly, not monthly, for perishables. Follow up receivables and collect regularly. And keep a buffer covering two weeks of fixed expenses. In RAWA the till, end-of-shift, receivables and purchases reports are in one place so you see the whole picture.
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Why am I profitable but out of cash?
Because profit includes stock and receivables not yet turned into cash.
How much cash reserve should I keep?
Many aim to cover two weeks to a month of fixed expenses.
Does the system help?
Yes — till, receivables and purchases reports in one place.
How often should I review cash flow?
At least weekly.