ABCounting Ltd

Tips & Advice

Everything you need to know to build the business you want

Why is my profit different than my bank balance?

The short answer is timing 🕰 

For the long answer get yourself a coffee ☕️ and sit down – this is hard to simplify into the character limit of a social media post…

Cash in the bank, for all businesses (especially small), is what keeps you operating – it’s what you use to pay your employees, your suppliers, yourself… but… it is only part of the story.

Typical differences are:
– Client invoices awaiting payment
– Assets like computer equipment
– VAT due
– Payroll/PAYE due
– Unpaid supplier invoices
– Previous year(s) profit/loss

Sometimes it’s hard to fathom when you become a business owner but when you have a limited company and you check the business bank account, not all of that money is yours! 😳

On top of what your online banking is telling you, there will always be money that is owed both from and to the business at any point in time.

This is why we offer cashflow forecasting as an additional service, it helps you to analyse the peaks and troughs and forces you to think about what is on the horizon.

If you’d like to chat about any of the above, give us a shout.

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