What is the first step in the cash flow cycle?

The cash flow cycle begins with the initial step of receiving raw materials and products. This step is crucial because it signifies the beginning of the production process and directly impacts the rest of the cycle. When a business receives its raw materials, it is positioned to manufacture products, which then leads to inventory storage and ultimately to sales. Understanding that the cash flow cycle starts with the intake of materials helps clarify the sequence of financial events in a business's operations. This foundational step sets the stage for subsequent activities that generate revenue and ultimately affect the company's cash flow management.