My business is profitable but I have no cash
This is the single most common sentence we hear from owners. It is almost never an accounting error. It is a timing and structure problem with five possible causes, and they have different fixes.
Profit is an opinion. Cash is a fact. The gap between them has a name and a number.
The P&L shows a good year. The bank account disagrees, and nobody can explain the difference in terms you can act on.
Owners in this position delay hires they need, borrow for operations, and start doubting numbers they should be able to trust. The uncertainty costs more than the cash does.
How to know if you have this
- Cash gets tighter as revenue grows
- You check the balance before making any commitment
- The line of credit never returns to zero
- Distributions are taken without a policy
How Advisory Motion solves it
- 01Reconcile profit to cash, line by line, so the gap is explained in dollars
- 02Decompose it into growth, margin, working capital, financing and owner draws
- 03Fix the largest cause first with a 90-day plan and a dollar target
- 04Install a rolling 13-week forecast so the answer stays visible
$480K of profit, $95K of cash
Inventory build and unstructured owner draws consumed the difference. Once quantified, a distribution policy tied to operating cash flow and an inventory target closed most of the gap within two quarters.
Illustrative composite · not a client identification