Bookkeeping tip of the week: know the difference between profit and cash flow!

Many business owners think that if they're showing a profit, their business is financially healthy. But here's the catch: profit ≠ cash flow.

Profit is what's left after expenses. Cash flow is the actual movement of money in and out of your bank account.

You can be profitable on paper but still struggle to pay bills if your cash flow is tight.

Here's why this matters:

-Late paying clients

-High inventory costs

-Loans you forgot to factor in

Staying on top of your books helps you understand both sides of the story.

If you're not reviewing your cash flow monthly, now's the time to start. Want help knowing where to look or how to interpret your numbers? Drop a comment or send me a message!