2 min read
How they differ
Profit records a sale when it happens, whether or not you have been paid. Cash flow tracks real money in your account. The two diverge whenever cash is tied up in unpaid invoices or stock.
Why the gap matters
A profitable company can fail if its cash is locked up when bills fall due. That is why lenders assess cash flow, and why working-capital finance exists — to bridge the gap between profit and cash.
What it means for you
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.
Frequently asked questions
Can a profitable business run out of cash?
Yes, and it is common. Profit is booked when a sale is made, but bills need cash. If money is locked in unpaid invoices or stock, a profitable company can still fail to pay its obligations.
Which matters more, profit or cash flow?
Both, but cash flow is what keeps the doors open day to day. Profit shows the business model works; cash flow shows it can meet its obligations right now.
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How do I forecast my business cash flow?
Build a month-by-month view of money in and out, so you can see gaps before they arrive — a cash-flow…
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Can I borrow if my profit is low but cash flow is good?
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.