The P&L is not the bank account.
Revenue and expenses are recognised under accounting rules; cash flow reflects when money actually moves.
Sell now, collect later.
Revenue can increase before the cash is collected, while payroll, VAT and suppliers still need funding.
Cash can be sitting in stock.
Inventory ties up cash before final sale and collection.
Not all cash collected is economically available.
Tax-payment timing can create liquidity pressure if it is not built into the forecast.
Cash outflow can be larger than the immediate P&L impact.
Equipment and software purchases require cash upfront while accounting expense may be recognised over time.
Principal repayment consumes cash.
Debt principal is a real cash outflow even though it is not operating expense in the same way as interest.
Growth itself can consume liquidity.
More sales often require more inventory, headcount and working capital before related cash is collected.
Monitor more than the bank balance.
- 13-week cash flow
- receivables
- payables
- working capital
- inventory days
- tax calendar
- capex / debt service
Connect accounting results to finance decisions.
CFO-lite & Management Reporting combines monthly close, P&L, working capital and cash-flow forecasting into one management view.