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Why profit and cash are not the same number

6 min readPublished May 15, 2026
Why profit and cash are not the same number

A profitable month can still leave the bank account thin. The four reasons, and how to see them coming.

Timing is the usual culprit

Revenue is recorded when you earn it; cash arrives when customers pay. Long payment terms turn a good month into a tight one.

Watch the balance sheet

Inventory purchases, loan principal and owner draws don’t show up on the P&L, but they all leave the bank account.

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