Profit Is Not Cash — And Why That Could Be Killing Your Business
If you’ve ever looked at your profit and loss statement and thought, “We’re doing great, so why does it feel like we’re broke?” — you’re not alone.
This is one of the most common (and most dangerous) traps I see business owners fall into. On paper, you might be profitable. In reality, you’re stressed about making payroll, juggling supplier payments, or watching the bank account like a hawk.
The reason? Profit is not the same as cash.
Profit vs Cash — The Key Differences
Loan repayments: You can be profitable, but if you’ve got a chunky loan repayment due, that’s cash leaving your account that doesn’t touch the P&L.
Timing: You record a sale today, but if your customer pays in 30 days (or 60, or 90), you don’t have the cash yet. Meanwhile, your bills are due now.
Depreciation & revaluations: Profit can be reduced by depreciation (a non-cash expense) or boosted by revaluing assets — neither of which put cash in your hand.
Investments in assets: Buying equipment or vehicles doesn’t show up as a hit to profit straight away, but the cash leaves your account immediately.
In other words: profit is a theory, cash is reality.
The Consequences of Confusing the Two
I’ve seen businesses — profitable on paper — get wound up by creditors because they couldn’t pay their bills.
I’ve seen founders stressed, burnt out, and blindsided by tax bills or supplier demands because they thought profit was enough.
Running out of cash is the single biggest reason businesses fail. And it almost always comes down to poor visibility, not poor ideas.
What I Recommend to Every Client
When I come in as a fractional CFO, the first thing I put in place is cash visibility:
✔️ A 13-week rolling cash flow forecast — so we know exactly what’s coming in and out week by week.
✔️ A 12-month cash plan — so we can model big moves like hiring, expansion, or investment before you commit.
✔️ A 3–6 month buffer — so unexpected shocks don’t become sleepless nights.
With these in place, you stop flying blind. You can make decisions with confidence. And you actually get to enjoy the business you’ve worked so hard to build.
Why a Fractional CFO?
Most $1-10M turnover businesses don’t need a full-time CFO — but they do need CFO-level insight. A fractional CFO gives you the strategic oversight and financial clarity without the full-time cost.
It’s not about “doing your books” (that’s your accountant or bookkeeper). It’s about designing your financial strategy so profit turns into cash, and cash supports growth.
The Bottom Line
Profit doesn’t pay the bills. Cash does.
If you’re relying on profit alone to guide your decisions, you’re playing a dangerous game. But with the right systems, strategy, and oversight, you can take control of cash — and finally stop worrying about whether there’ll be enough in the bank next month.
👉 Ready to take control of your cash flow?
👉 Email me at jordie@theedgecfo.com