This is a face many business owners know: you’re on the phone with your accountant and you can’t understand how you are PROFITABLE BUT HAVE NO CASH. — Profit and cash are two very different things. Profit is a theory; cash is a fact. Enron was profitable when it went under…but had no cash! — You can’t pay your bills with profits (try showing a vendor or creditor a P&L for payment), you can only pay them with cash. — The goal of ANY business is to turn assets -> revenues; revenues -> profits; and *profits -> cash.* — Miss that last step or confuse profits for cash and you will go the way of Enron, and many other “profitable” businesses. — There are a few levers that can turn profit into cash but the lowest hanging fruit is usually: 1) Accelerate receivables (AR) 2) Decelerate payable (AP) — Stop pursuing profits and start chasing cash! — #entrepreneur #entrepreneurship #entrepreneurlife #businessowner #businesswomen #businessman #smallbusiness

via IFTTT This is a face many business owners know: you’re on the phone with your accountant and you can’t understand how you are PROFITABLE BUT HAVE NO CASH.
—
Profit and cash are two very different things. Profit is a theory; cash is a fact. Enron was profitable when it went under…but had no cash!
—
You can’t pay your bills with profits (try showing a vendor or creditor a P&L for payment), you can only pay them with cash.
—
The goal of ANY business is to turn assets -> revenues; revenues -> profits; and *profits -> cash.*
—
Miss that last step or confuse profits for cash and you will go the way of Enron, and many other “profitable” businesses.
—
There are a few levers that can turn profit into cash but the lowest hanging fruit is usually:
1) Accelerate receivables (AR)
2) Decelerate payable (AP)
—
Stop pursuing profits and start chasing cash!
—
#entrepreneur #entrepreneurship #entrepreneurlife #businessowner #businesswomen #businessman #smallbusiness https://ift.tt/2MOUZqu