The month you hit target is the month cash gets tight

Profit and cash run on different clocks, and the gap between them quietly sets a ceiling on how fast a business can grow on its own money.

By Steve 5 min read
Abstract bridge artwork for The month you hit target is the month cash gets tight

A familiar pattern: the sales team finally delivers the quarter everyone has been asking for, the P&L looks better than it has in two years, and the bank balance is worse. Nobody has made a mistake. Nothing has been stolen. The business is simply doing what growing businesses do, buying next month’s revenue with this month’s cash. This is one of the few places in business where good news and bad news arrive in the same envelope, and it catches out capable operators repeatedly, because the instinct is to treat…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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