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I am making a profit, but where is the money?

Sheree says…

Your accountant and your Profit & Loss report both say you have made a profit, but you are wondering why all that money is not in the bank.

There can be a number of reasons for that.

If you have invested in equipment or an asset, the value of the asset may be assigned to the Balance Sheet rather than the Profit and Loss ie. This money will have gone out of your bank account, but won’t show up as an expense in your Profit and Loss; this amount does not come off your bottom line.

If you carry stock, there is often a lag between your payment purchasing the stock and you receiving the funds from your customers for the sale of that stock.

If you offer your customers credit, there is a further delay in you receiving the funds for the sale. The number of days between the sale to your customer and the date they pay, is known as debtor days. Reducing this number of debtor days will get your money in to your account.


There are a number of educational pieces around this topic in our Useful Information section, and you can always contact us for further clarification of your particular circumstances.

To discuss how you might improve your cashflow, please click on the Contact Us button, and we will be in touch to send you a form to complete that will tell us a bit more about your business, and we will then call you to set up a meeting.

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