This week a client called with a cash crisis. Not a profitability crisis. The P&L showed a healthy gross operating profit. The bank account was on life support anyway.
The ask was simple: show me what’s past due and what comes due in the next 7 days. Triage. When you can’t pay everyone, you need to see exactly who can’t wait.
What got built
Payables sorted by due date, with a past-due filter and a user-selected cutoff. Open payables sortable by due date, vendor, and amount. With limited funds, the client attacks the invoices that matter most first.
Then the part they didn’t ask for: a vendor priority table. Every vendor ranked by what they do. Utilities that keep the lights on. Benefits that keep the team covered. Down through the nice-to-haves. Sort by priority, check it against available cash, and the payment order writes itself.
Here’s what this build keeps teaching me: profit is an accounting construct. Cash pays the bills.
Three reasons profit and cash part ways
A P&L can show profit while the bank account bleeds. Three reasons.
Receivables. Revenue is booked when you invoice. Cash lands 30, 60, 90 days later. Every new sale drains cash before it creates any. You do the work, then you wait. Fast-growing companies die this way. Growth eats cash first.
Inventory and equipment. Cash leaves the day you buy. The P&L sees it slowly, through cost of goods sold or depreciation spread over years. The statement stays calm while the money walks out.
The fixed calendar. Payroll hits every two weeks. Rent hits on the first. Loan payments don’t care when your customers pay you. The calendar never sleeps.
The old line among accountants: profit is an opinion, cash is a fact.
The P&L tells you whether the model works. Cash tells you whether you survive the month. Most dashboards show the first and ignore the second. Another rearview mirror.
What you need is cash position next to profit, every week, before the decisions get made for you.
Can you say what your cash looks like in 30 days?
If you can’t, that’s the gap. The Direction Session is thirty minutes. You leave knowing where your cash stands and what to pay first. Book your Direction Session.
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Payroll is the cash line you can still change.
The free Overtime Early-Warning tool flags anyone heading past 40 hours by mid-week, while there’s still a decision to make. One Excel file. No software.