Business owners must always keep a vigilant eye on the amount of funds that flow in and the amount that flows out.  An incessant infiltration of negative cash flow (where expenses exceed profit) can cripple a business or even put it out of its misery.  Particularly in today's volatile economic market, merchants must be extremely knowledgeable about operation costs and its impact on the operation.  Similarly, business folks must be acutely aware of the ledger of positive cash flow because what's anticipated may not actually materialize in real life.  Think of the scenarios where a merchant receives a number of bounced checks ... or is hit with a rolling reserve by their credit card processor.

While I've covered this topic before, it's very disconcerting to learn how many people receive overdraft notices and penalties, stemming from inadequate fund reserves in their designated merchant account bank.  On a merchant account application, business folks must indicate where credit card processing funds will be deposited and deducted.  Intuitively, merchants believe that the merchant bank account balance will grow and easily outpace processing-related costs.  However, at any given time, the converse may be true and financial penalties may consequently result.