Why Doesn't My Profit Match My Cash?

This free explainer is for Ontario small business owners who look at their income statement, see a profit, and then look at their bank account and wonder where the money went. Enter a few numbers about your receivables, inventory, loan payments, tax installments, and owner draws, and the tool shows you — in plain language — where your cash is being tied up and which single lever would free up the most money this month.

Profit and cash are not the same thing. Profit is an accounting number: revenue earned minus expenses incurred, whether or not the cash has moved. Cash flow is the actual money going in and out of your bank account. A business can be profitable on paper while running out of cash because customers pay slowly, inventory is sitting on shelves, HST is due, a loan principal payment came out, or an owner draw quietly ballooned. Understanding the gap is the first step to closing it — and it's the reason most healthy small businesses still feel short of cash.

If you'd like a CPA to review the numbers and build a rolling cash flow forecast with you, see cash flow & planning services or book a free 30-minute call.