The purpose of a business is to make money, and that means you need to know the difference between profit and cash flow.
Net profit is what you have left after you deduct all your business expenses from all your revenue. You can improve net profit only by changing the things that affect revenue and expenses.
For example, if:
Cash flow comes from various sources. However, it also covers operating expenses, taxes, equipment purchases, repayments, distribution, and so on. Note that a profitable business does not always have good cash flow. And a business with good cash flow is not always profitable. For example, you can have good cash flow, and loss-making expenses.
To work out how fast you can grow your business, look at your projected cash flow. We can advise you on this.
Your business can’t survive without cash.
The following six takeaways are essential for business success:
If you want us to evaluate your current financial strategy, identify key areas for growth, and provide actionable insights to help you improve your cash flow, then
book a discovery call with Donald Inglis.
If you’d like to improve your company’s financial performance, or don’t feel you’re getting enough support from your current accountant, book your free discovery call with us today.
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