When Profit Doesn’t Pay the Bills: A Common Cash Flow Trap (and How a Bookkeeper Can Help)
Here’s a scenario I’ve seen play out more times than I can count: A small business owner pulls up their profit and loss statement and sees a solid bottom line. Business is booming! Clients are happy! Sales are up! But… they’re still struggling to make payroll. Vendors are sending reminders. The checking account balance feels way too low for how “profitable” the business looks on paper. What gives? It’s a classic case of cash flow vs. profit , and one of the most common traps small businesses fall into: a timing mismatch between money coming in and money going out. The Problem: Revenue Timing Mismatch You might invoice a client today, but that doesn't mean the money hits your account today. Or even this week. Or this month. Meanwhile, your bills, subscriptions, vendor payments, and payroll don’t wait. They’re all on a schedule—one that might not line up with when your revenue actually arrives. This is especially painful if: Your customers have long payment te...