10/19/2026
Your financial statements show a profit, but your bank account seems to have missed the memo. ๐ญ
It is one of the most common points of confusion for business owners, because it feels logical to assume that profit and the amount of money sitting in your bank account should be relatively similar.
In reality, they are measuring different things.
Your profit and loss statement shows the income your business earned minus the expenses included in calculating profit.
Your bank balance reflects the actual cash moving in and out of the business.
That difference matters because some cash outflows, including loan principal payments, owner draws, HST remittances, and payroll deduction remittances, do not reduce profit in the same way a regular business expense does.
As a result, a business can report a healthy profit while having considerably less cash available in the bank.
Understanding both numbers gives you a much more complete picture of your finances and helps you make better decisions about spending, planning, and upcoming obligations.
If you have ever looked at a profitable month and wondered where all the cash went, you are asking exactly the right question.
We can help you find the answer. ๐
๐ฒ 613-205-1305
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๐ www.kpsbooks.com