Why Your P&L Shows Profit but Your Bank Account Is Empty
Your P&L says you made money.
Your bank account disagrees.
Let's fix that confusion.
The Short Answer
Your P&L records when you earn money.
Your bank only cares when you receive money.
Those two moments almost never happen at the same time — and the gap between them is where your cash disappears.
Your P&L Doesn't Track Cash
A P&L tracks activity, not movement of money.
Send an invoice → the P&L counts it as revenue immediately.
But the cash? Still sitting in your customer's bank account until they pay.
P&L = performance
Cash = survival
If they ever disagree, trust the cash.
The 4 Places Your Cash Is Hiding
1. Customers Haven't Paid Yet (Receivables)
You did the work. You invoiced. You recorded the revenue.
But the customer hasn't paid.
2. Inventory Sitting on Shelves
You paid for products upfront. They're sitting in your warehouse, not in your bank.
The expense only hits your P&L when you sell them.
3. Loan Repayments
Loan payments use real cash, but only the interest shows on the P&L.
4. Owner Withdrawals
When you take money out for yourself, cash drops — but the P&L doesn't record it as an expense.
What You Can Do
- Check overdue invoices every week
- Keep an eye on inventory levels
- Review your cash runway every month
- Understand your loan repayment schedule
- Plan owner withdrawals instead of reacting to them
Small habits prevent big surprises.
The Real Lesson
Profit tells you if your business model works.
Cash tells you if your business can stay alive.
Profit is a score.
Cash is oxygen.
See Where Your Cash Is Actually Going
PlainFinancials shows you the "cash bridge" — exactly where money went between your profit and your bank account.
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