Spot It.
Your accountant says you made money last year, and the profit and loss statement looks healthy. Yet every other week you are checking the bank balance before payroll, deciding which bills to pay first and wondering where the profit went. Growth makes it worse, not better. The busier you get, the tighter cash feels.
Sight It.
Profit and cash are not the same thing, and the gap between them is where owners get squeezed. Cash goes out for materials, payroll and inventory long before customers pay. Money gets tied up in unpaid invoices, extra stock, equipment purchases and loan payments, none of which look like expenses on the profit and loss. Without a cash forecast, you only see the squeeze when it arrives.
Solve It.
Start watching cash, not just profit:
- Build a simple 13-week cash forecast: money expected in and money going out, week by week.
- List where cash is tied up today, such as unpaid invoices, inventory and prepaid costs.
- Pick the biggest one and set a target to free up part of it this quarter.
- Update the forecast every Monday with actual numbers.
- Talk with your banker about a line of credit before you need it, not after.
Once you can see the next three months, the surprises shrink.
Fixed it yourself? Great. Want help making it stick? Talk to a Troubleshooter.