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The P&L statement your accountant produced for last quarter showed a handy profit.
But where’s the money?
Some is in the bank account, which is nice, but it’s not nearly what you hoped would be there. Some sits on shelves out the back as paid-for but unsold inventory. And some languishes in Accounts Receivable, >60 days, because no one actively follows up and chases payment.
Individually, these things are not crisis material. Each gets fixed with some management attention and a few phone calls.
But together, they’re a trend that’s not moving your business in the right direction.
Profit is good but it’s not money in the bank unless you actively manage it there. Profit doesn’t pay your expenses; that’s what cash is for. The trick is to manage your business so that profit converts into cash as quickly as possible.