If your business is “profitable” — but your bank account feels tight — you’re not alone.

Many Canadian business owners tell us:

“My reports show profit… but I still feel broke. Where is the money going?”

You’re working hard. Sales are growing. But somehow:

• Payroll feels stressful
• CRA deadlines appear out of nowhere
• You delay purchases because cash is tight
• You start doubting yourself

Here’s the truth:

This usually isn’t a failure problem.
It’s a cash flow problem — and it can be fixed.

At Finmate, we help Canadian businesses understand their numbers clearly — without confusing accounting jargon.

Let’s break it down simply.

Profit and Cash Are NOT the Same Thing

Your Profit & Loss statement shows what you EARN.
Your bank account shows what you actually HAVE.

Those two numbers almost never match — and that’s normal.

Think of it like this:

• Profit = on paper
• Cash = real life

Your business may show profit…
but your bank balance may still feel tight because of what’s happening behind the scenes.

Here are the most common reasons.

1️⃣ Customers Haven’t Paid Yet

You’ve invoiced your clients.

So on paper — revenue looks great.

But if they pay:

• 15 days late
• 30 days late
• 60+ days late

The money still isn’t in your bank account.

What helps:

• Clear payment terms
• Deposits upfront
• Automatic reminders
• Payment links right in invoices
• Late fees when needed

Cash sitting with customers doesn’t help your business grow.

2️⃣ You Paid Expenses Upfront

Some things get paid now, but show slowly on your reports later.

Like:

• Insurance
• Software paid yearly
• Equipment
• Deposits or prepaid rent

Your cash leaves immediately —
but the expense shows gradually.

That’s why the numbers feel confusing.

3️⃣ Inventory Is Eating Your Cash

If you sell physical products, inventory becomes an asset first — not an expense.

So you spend cash buying stock…

But until you sell it, it doesn’t fully reduce your profit.

What helps:

• Forecast demand
• Avoid over-ordering
• Track slow-moving items
• Use systems that sync with bookkeeping

Too much inventory quietly drains cash.

4️⃣ Loan Payments Don’t Fully Show as Expenses

When you pay a loan:

• Interest counts as expense
• Principal does NOT

But both leave your bank account.

So cash drops — while profit still looks okay.

5️⃣ Taxes, HST, Payroll and CRA Obligations

Money for CRA often sits in the same bank account — and it feels like yours.

But eventually, it leaves.

And suddenly cash disappears.

What helps:

• Separate “tax” bank account
• Track HST + payroll monthly
• Forecast upcoming payments

No surprises.

6️⃣ Owner Withdrawals

Sometimes cash disappears because owners take money inconsistently.

Not on purpose — life just happens.

• Household expenses
• Credit cards
• Emergencies
• Lifestyle creep

What helps:

• Pay yourself consistently
• Keep business + personal separate
• Review withdrawals monthly

Clarity protects both your business and your peace of mind.

So… How Do You Fix It?

Here’s the simple system we use with our Finmate clients.

Step 1: Track Profit AND Cash Separately

Don’t rely only on your Profit & Loss.

You should also review:

• Cash flow statement
• Cash forecast
• Upcoming bills + obligations

This gives you real visibility.

Step 2: Build a Simple Cash Forecast

Even a simple spreadsheet helps.

Track:

• Starting cash
• Expected money coming in
• Expected expenses
• CRA and HST
• Payroll + loans

Update weekly.

Suddenly, cash problems stop being surprises.

Step 3: Improve Collections

Cash stuck with customers isn’t helping you.

Shorten payment terms.
Take deposits.
Use reminders.
Make paying easy.

Businesses that collect well rarely struggle with cash.

Step 4: Create a Tax Holding Account

Every time money comes in:

Move HST + estimated taxes into a separate account.

When CRA is due — you already have it.

Step 5: Review Monthly With Someone Who Understands Numbers

You don’t need to become an accountant.

But you DO need visibility.

Each month, review:

• Cash trends
• Accounts receivable
• Accounts payable
• Upcoming CRA obligations
• Difference between cash and profit

Clarity leads to better decisions.

How Finmate Helps

Finmate is built for Canadian small businesses that want financial clarity — without overwhelm.

We help you:

• Organize and clean your books
• Track cash separately from profit
• Build simple, understandable cash flow forecasts
• Plan ahead for CRA
• Understand your numbers

No stress. No judgment. Just clarity.

Final Thought

If your business shows profit but your bank account doesn’t…

You’re not doing anything wrong.

Your cash just needs a better system.

And once it’s clear, everything becomes easier:

• Paying bills
• Planning growth
• Paying yourself
• Sleeping better

If you’d like help setting this up — we’re here.

Book a free consultation with Finmate
Let’s make your finances simple, clear, and under control.