In this episode, Paul Maskill discusses the crucial distinction between profit and cash flow, two financial concepts that are often misunderstood as being one and the same. Understanding the difference is vital for businesses and individuals alike, as it can significantly impact financial decision-making and overall financial health. He identifies common cash flow issues faced by business owners in the trades, such as accounts receivable, vendor payments, debt payments, and poor bookkeeping. Paul provides actionable strategies for improving cash flow, including the importance of timely and accurate bookkeeping, cash flow forecasting, and setting clear financial targets. Whether you're a business owner, entrepreneur, or simply looking to improve your financial literacy, this video will provide you wi th a clear understanding of the big difference between profit and cash flow.
In this episode, Paul dives into:
- Why profit does not equal cash in the bank.
- How accounts receivable can create significant cash flow issues.
- How owner's draws and tax payments impact available cash.
- How bad bookkeeping can inflate perceived profits.
- Why cash flow forecasting is necessary for informed decision-making.
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