From the course: QuickBooks Online: Best Practices to Unlock Business Growth
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Cash flow vs profit - QuickBooks Online Tutorial
From the course: QuickBooks Online: Best Practices to Unlock Business Growth
Cash flow vs profit
My company has a client named Andrew who runs a landscaping business. He was a ridiculously hard worker all year round. Though he had a great business and was making a steady profit, he was always short of cash. He hardly paid himself, yet he was even behind on paying his employer payroll taxes. Have you ever found yourself in this situation? Cash and profit are not the same thing. In this lesson, you'll learn how to determine what income and profit you need to cover your cash needs each month. So what is the difference between profit, cash flow and cash forecast? And how do you determine what income you need to successfully manage your organization? Profit is income less expenses. All the money you make in a period, less what you spend. Cash flow is the difference between the net cash that you had at the beginning and the end of the period. Cash flow is impacted by principal payments made on loans, as well as changes in balance sheet accounts like prepaid insurance or increases in…
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