Profitable on Paper. Short on Cash?

Your financial statements show a profit. Your bank account tells a different story.

Sound familiar?

Imagine your business reports $150,000 in annual profit, but you have only $25,000 available in the bank.

Where did the money go?

Profit and cash flow are not the same thing.

Here are three common reasons why:

1. Unpaid customer invoices. You completed the work and recorded the revenue, but the customer hasn't paid yet. Your profit may be recorded, while the cash is still sitting in Accounts Receivable.

2. Equipment purchases. You spent $40,000 on equipment. The cash leaves your bank account, but the entire purchase generally doesn't appear as an immediate expense on your Profit & Loss statement.

3. Loan principal payments. Paying down business debt reduces your cash balance but doesn't reduce your reported profit in the same way as an operating expense.

These examples illustrate why a profitable business can still experience cash shortages.

Three Questions Every Business Owner Should Ask

• How much cash will my business need over the next 90 days?
• How much of my reported profit is tied up in unpaid invoices?
• Can I explain the difference between my net income and my available cash?

Understanding these numbers helps you make better decisions about hiring, equipment purchases, expansion, and owner distributions.

Profitable Today. Valuable Tomorrow.

How Financially Healthy Is Your Business?

Schedule a complimentary 30-minute Discovery Session with Oleg Denishenko, Strategic CFO at New Vision Business Advisors.

We'll discuss your business, explore your financial priorities, and identify questions that may deserve closer attention.

No financial statements are required for the initial meeting.

Schedule Your Complimentary Discovery Session:

https://calendly.com/nvba

Oleg Denishenko

Strategic CFO | New Vision Business Advisors