A business can show a healthy profit in its accounts and still struggle to pay its bills. Here is why accounting profit and cash availability are two very different things.
A business can show a healthy profit in its accounts and still struggle to pay suppliers at the end of the month. This is one of the most common surprises for SME owners.
Draft template — to be reviewed and completed before publication.
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Wafra Insights provides general information for educational purposes and should not be treated as accounting, tax, legal or other professional advice specific to your circumstances. Requirements may differ depending on your business and situation. Seek appropriate professional advice where required.
Growth can strain cash before it strengthens it — higher supplier commitments, more payroll, larger receivables and timing mismatches explain the paradox.
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