Dr. Paul Borosky, DBA, MBA is a business consultant in Sanford who specializes in finance. This is the problem he explains more than any other, and here is his perspective on fixing it.

Your profit and loss statement says you made money last month. Your bank account disagrees. You are not confused, and your bookkeeper is not wrong.

Profit and cash are two different numbers. If you are profitable but no cash shows up in the bank, the money is stuck somewhere between the sale and the deposit: unpaid invoices, inventory on the shelf, loan principal, owner draws, or taxes. Find where it is stuck, pull four simple levers, and run one weekly report. That gap is where most growing businesses get into trouble, and it is fixable.

Why do profit and cash disagree?

Profit records the sale. Cash records the deposit. Everything between those two events is invisible on a profit and loss statement.

Unpaid invoices sit there. Inventory sits there. Loan principal, equipment payments, owner draws, and tax set-asides all move real money, and none of them show up as an expense where you would expect to find them.

So an owner reads a profitable month, then cannot cover payroll on the fifteenth, and decides something is wrong with the books. Nothing is wrong with the books. They are answering a different question than the one you are asking.

Why does growth make it worse?

This is the part nobody warns owners about. Growth eats cash. More sales means more inventory bought before it sells. More jobs means more payroll run before customers pay. A business growing 30% can be more profitable and less able to pay its bills at the same time, and the owner has no idea why the good year feels so tight.

Related: Rising labor costs squeeze cash first. Read the business consultant's perspective on Florida's $15 minimum wage. Florida's $15 Minimum Wage

Which four levers close the gap?

1. Terms. When you get paid and when you pay. Moving a supplier from net 15 to net 30, or a customer from net 30 to net 15, changes your cash without changing a single sale.
2. Collections. Know who your slow payers are. Most owners can name the customer instantly and have never done anything about it.
3. Inventory. Cash sitting on a shelf is cash you cannot use. Slow-moving stock is one of the most expensive habits in small business, and it never shows up as a line item.
4. Deposits. Get paid something before you spend something. This one fix has saved more contractors than any other on the list.

What is the one report that answers the question?

Not a profit and loss statement. Not a budget. A 13-week cash forecast: money in, money out, week by week, 13 weeks ahead.

Thirteen weeks is one quarter. That is far enough out to see a problem while you can still fix it, and close enough that the numbers mean something. Update it weekly. Once it is built, it takes about 20 minutes. An owner with a 13-week cash forecast never gets surprised by payroll.

Related: Thinking about expanding? See how to model the cash before you sign in the Seminole Towne Center redevelopment perspective. Seminole Towne Center Redevelopment

What are the warning signs you have a cash gap?

Most owners feel the cash gap long before they can name it. If two or more of these sound familiar, the problem is not your profit. It is your cash cycle.

• You move money between accounts or onto a credit card to make payroll, even in good months.
• You know what you sold last month, but not what customers still owe you today.
• Your best sales month is followed by your tightest cash month.
• You hold off paying suppliers until a big customer check clears.
• Tax time is always a surprise, because nothing was set aside along the way.
• You say yes to a big new job, then panic about how to fund the materials and labor before the first payment.

Every one of these has a fix. None of them get fixed by working harder or selling more. Selling more without fixing the cash cycle usually makes them worse.

How Does This Hit Different Industries?

The same issue lands differently depending on what you sell. Here is how a business consultant would break it down for three kinds of Sanford businesses.

How a Business Consultant Helps

Profit is an opinion. Cash is a fact. The businesses that survive a tight year are not always the most profitable ones. They are the ones that saw the crunch coming weeks out and had time to act. Most owners never got trained on this. They learned the trade, not the cash cycle.

Dr. Paul Borosky, DBA, MBA closes the gap with Organize-Plan-Grow™. Organize: clean up invoicing, collections, and inventory so you can see where the cash is stuck. Plan: build the 13-week cash forecast and set terms and deposits that keep money flowing. Grow: take on more work without running out of cash to fund it.

With 500+ financial models built over 14+ years and 1,000+ clients, Dr. Paul can build the forecast and then fix the operating decisions underneath it, which is where the cash gap actually comes from.

Dr. Paul works on site with owners across Sanford and Seminole County. See how he works as a Sanford business consultant, review his fractional CFO services, or learn more about Dr. Paul's Organize-Plan-Grow™ Strategy.