Where Did My Money Go?

As we start the new week, I wanted to share a few details on Cash Flow. You are a new reader to the CFC, so I like to give you all as much detail as I can that I 100% believe can help you, your business, and your accounting knowledge!

One of the biggest misconceptions in small business finance is that being profitable automatically means you’re financially healthy. Profit is important, but it’s not the full story. The real driver of business survival is cash flow — the actual movement of money in and out of your accounts. This happens daily, and managing it closely really does make a difference.

You can be profitable on paper while still struggling to pay bills….Here’s why: profits are measured by subtracting expenses from revenue, but not every expense (or payment) lines up neatly with when money moves. That timing difference can create serious stress.

Why Cash Flow Matters More Than Profit

• Bills Don’t Wait – Vendors, employees, and lenders expect payment regardless of whether your customers have paid you yet.

• Growth Requires Cash – Expanding your team, buying equipment, or taking on a new project needs upfront cash, not just projected revenue.

• Emergencies Happen – Unexpected repairs, client delays, or economic shifts can all drain cash quickly if you’re not prepared.

Common Cash Crunch Scenarios

1. You close a big sale and celebrate the revenue, but the customer takes 60 days to pay while your expenses are due in 30.

2. You invest heavily in inventory ahead of a busy season, but sales don’t ramp up as fast as expected.

3. You’re profitable for the year, but most revenue arrives late, leaving you stressed about meeting payroll mid-year.

In each case, profitability looks fine, but cash flow tells a different story.

How to Stay Ahead of Cash Flow

• Forecast Weekly – Track inflows and outflows at least 6–8 weeks ahead. This helps you see gaps early. I recommend a 13 week cash flow for those just starting. Email me and I’ll set it up for you.

• Tighten AR – Send invoices immediately, use automated reminders, and set clear payment terms. PROACTIVENESS wins here.

• Strategize AP – Negotiate vendor terms and schedule payments to match incoming cash. Ask for longer terms…you never know.

• Build a Buffer – Aim to set aside a reserve for 1–2 months of expenses and work to limit expenses that aren’t necessary.

The Bottom Line…

Profit shows your long-term potential, but cash flow determines whether your business survives the short term. By focusing on when money actually moves, not just what’s on paper, you gain the clarity and control to grow without constant financial stress.

As a veteran-owned business leader, you know discipline and preparation make all the difference. Cash flow management is the same: stay alert, stay proactive, and keep your operation financially mission-ready. Ready to partner together and get things rolling? Email me today. I’m offering up discounts to Veteran business leaders and owners!

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Contact me if you’d like to network or partner together. I’d love to chat with you more about the services I offer on the side through Guernsey Consulting. If you do not know, I work full time in Treasury Management and do consulting on the side. Would love to chat or network with you about it.

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