We hear this from business owners all the time—and it’s a valid question.

Your Income Statement might show a healthy profit, but that doesn’t mean cash is flowing into your bank account. That’s why the most important report for any small or medium business isn’t just the Income Statement or Balance Sheet—it’s the Cash Flow Statement.

So, where is the money going?

Trade Receivables (Debtors Book)

You’ve done the work, sent the invoice, and recorded the income—but if the client hasn’t paid yet, that profit is sitting in your debtors, not your bank account. If you’re paying suppliers and expenses upfront while giving customers 30+ days to pay (or they don’t pay at all), your cash flow takes a hit. Add VAT payments on unpaid sales, and the pressure builds quickly.

Loans

If you’ve financed a vehicle or taken a business loan, monthly repayments leave your bank account, but only the interest shows on your Income Statement. It’s easy to forget how much cash is going out this way.

Shareholder Loans

This is a big one. Whether it’s drawing funds without a salary or using business cash for personal expenses, shareholder loans quietly drain cash—without showing up as expenses on your Income Statement.

The fix?

It’s simple in theory, harder in practice:

• Get customers to pay on time—or better yet, upfront
• Offer early payment discounts
• Add easy payment options to your invoices
• Track your cash flow monthly, not just your profit

Need help making sense of it all? The Business Counter can help you break it down and build a cash flow plan that works. Let’s get your bank balance reflecting your hard work.