There has always been a debate about which one is more important to base your business on. I was just wanting to get some imput on this subject. Which one do you think is more important to your day to day operations and why?

Thanks

You live or die on cashflow. At the end of an accounting period it's nice to settle up and find you were profitable, but if the cash runs out you will never get to check the profitability

Cash flow is very important for a business and I'd say would be more important to look at. Cash flow for operating activities tells you how well you're doing with actual cash in the profit & loss area. With profit & loss in accrual accounting, you're trying to figure out when to recognize revenue and how to defer it as actual income to future years (if possible). Cash flow for investing activities tells you how well the business has been able to invest their cash and create additional wealth for the business. (Cash flow for financing activities is important if you're trying to track whether you're paying out too much to shareholders or are receiving more and more cash from investors or banks.)

Profit & Loss is always skewed, and is only a reflection of operations. Cash flow is where most things end up at one point or another, so it's very important to monitor.

They are different,related, and both equally important.

Cash management is the fundamental of daily job. Running out of cash means financing. Financing means costs. Costs affect an intermediate P&L line. The intermediate line affects the bottom negatively. To compensate some others active lines should be varied ONLY because you run out of cash.
Running out of cash places an "unreal" (let me say this way) burden on sales and/or production.
On the other side, the P&L tells you the general health status of your business. Splitting the P&L over time tells you how you are doing and how you'll likely be doing. Splitting the P&L over clients will tell you which are the profitable ones. Splitting the P&L over products will tell you which are the products which will bring you the most.
It is not difficoult to keep track of both payments and P&L in an Excel file, and use pivots and macros to analyze them.

Probably I'll write something about in my blog in the near future.

Simply stated, Profit & Loss is the "ideal." Cashflow is the reality. P&L is good for an overview, but if you have customers who late-pay or no-pay, it can really skew your numbers.

CashFlow is quite possibly the most important aspect of a business. Tracking and analyzing the day-to-day operations will allow you to predict expenses in the near future and whether or not you will be able to afford to keep your business up and running. Those who do not figure out how to understand payables and receivables and compare the two in the CashFlow detail, will not survive in business for themselves.

you seem to have a good understanding of this stuff!

I'm currently working on some financial applications and it would be nice to get some of your feedback on them. Currently some of then are on demo mode, but the intention is to move them to the following sites:

MoneyLiberty.com for personal finance and possibly business finance as well and

TheInvestorWealth.com for real estate finance.

You can check the existing demos at the following link:

http://garisoft.com/atk/admin

username: administrator

password: demo

Feel free to email me your comments and suggestions at the following email:

info@GariDigital.com

Thanks in advanced for your time.