You had a profitable year — the P&L says so — and there's nothing in the bank. How? Because profit and cash are not the same thing, and almost nobody gets taught the difference. Profit is a timing story. You can book revenue before the cash shows up — invoice a customer on net-30, and the sale lands this month while the money lands next. It runs the other way too: sell a $100 gift card, and you've got the cash, but it's a liability, not revenue, until someone redeems it. Inventory ties up cash months before the cost ever hits your P&L. And depreciation lowers your profit on paper while no cash leaves at all — meaning that money is most likely still sitting in your account. This episode walks through each of those timing gaps, with Starbucks and a coffee shop as examples. Get them straight, and two things happen: you stop being blindsided by your own P&L, and if you ever look at someone else's books to buy their business, you know exactly what to ask about.

Hosted by Julie Bonner. Bookkeeping and financial help for business owners — https://coeurbridge.com