For retail companies, the months just before the holidays are a time when cash flow can be particularly tight. You need more inventory from your suppliers to prepare for an influx of sales, but if those supplier payments come due before your sales actually happen, you may have trouble paying bills on time.
Using a cash-flow statement will help you track your inflow of revenue and outflow of expenses during a specific time period. This will help you anticipate when you’ll have more money going out than coming in, so you can plan ahead for those difficult periods. Without one, you’re just guessing at whether you’ll have the money you need when you need it, and you’ll increase your chances of facing late payments and other penalties on past due invoices.