Your P&L shows profits. Orders are healthy. But your bank balance tells a different story. So the real question is—if the business is profitable, why is there never enough cash?
Hi, I’m Shrikant Prabhudesai. I work with B2B manufacturing businesses to improve delivery, control costs, and bring predictability to cash flow.
The key reason is this—profit and cash are not the same thing.
Profit is what you earn on paper. Cash is what actually comes into your bank.
In manufacturing, cash gets stuck in three places.
First, receivables. You deliver on time, raise the invoice, but customers pay late. On paper you’re profitable, but your cash is still sitting with the client.
Second, inventory. Raw material, WIP, finished goods—this is all cash that has already left your bank. If production planning is off or demand is uneven, inventory quietly blocks cash without showing up as a problem on the P&L.
Third, work-in-progress. Jobs that are started but not completed don’t generate invoices. The longer they stay on the shop floor, the longer your cash remains locked inside the factory.
The moment you see cash flow as a system—not just an accounting number—you start fixing the real issues: faster collections, tighter production cycles, and better inventory control.
So if your business is profitable but cash is always tight, don’t panic. Look beyond profit and track where your cash is getting stuck. Fix those leaks, and your bank balance will finally start reflecting your hard work.
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