“I made money this year — so why does the bank account feel tighter than ever?”

This is one of the most common (and most confusing) moments for business owners. On paper, the business is profitable. In real life, cash feels scarce. The disconnect usually comes down to one thing:

Revenue and cash are not the same.

Profit doesn’t pay bills — cash does

Profit is an accounting result.
Cash is what actually keeps the lights on.

You can be profitable while:

• Waiting on unpaid invoices
• Carrying large tax balances you haven’t set aside
• Reinvesting heavily into inventory, equipment, or growth
• Making loan or lease payments that don’t fully show up on the P&L

None of this means the business is failing — but it does explain why profit doesn’t always feel like money you can use.

Growth often tightens cash before it helps it

Ironically, growing businesses feel this pain the most.

More work means:

• Higher upfront costs
• More payroll before payment comes in
• Bigger GST or corporate tax obligations later
• Cash tied up in tools, software, or inventory

Growth looks great on reports — but it can quietly strain cash if timing isn’t managed carefully.

The “phantom money” problem

A common mistake is mentally spending money that hasn’t actually arrived yet.

Invoiced ≠ paid
Sales ≠ spendable
Profit ≠ free cash

When those distinctions blur, businesses end up relying on credit cards or lines of credit despite “good numbers.”

Cash clarity creates confidence

Once owners can clearly see:

• What’s been earned
• What’s been collected
• What’s already spoken for (tax, payroll, debt)

Decision-making gets calmer. Pricing improves. Growth becomes intentional instead of stressful.

This is where good bookkeeping stops being administrative and starts being strategic.

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