It's a lot to get your head around - cashflow, profit, net profit, gross profit. Why aren't we taught this stuff at school right?!
As a business owner, you will need to understand the difference between cashflow and profit - they are different, but they affect one another.
Cashflow is literally just the money in and out of your bank account.
Profit is the money you have leftover, after everything is paid.
You can have great cashflow (plenty of money in the bank) but not be making much profit.
Alternatively, you might experience bumpy cashflow, but still make a solid profit.
Most business owners get caught out by timing—spending cash on other business activities, only to be left with a tax bill and no money in the bank.
In this 4-part video series, I'll explain how profit and cashflow are related but different, why you might have no money in the bank, and how to get some cash back in!
Video 1: How do I end up with profit but no money in the bank?
Video 2: How to avoid 'no money' in the bank account
Video 3: Why don't I have money left over to pay my GST?
Video 4: How I organize my money in my business and stay on top of my tax bills.
Where to get more help.
Thanks for watching our videos - if you want more help with cashflow, book a FREE Xero review, we will review your Xero and make recommendations to improve you cashflow.
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