Why Your Business Might Be Making Money But Still Struggling with Cash Flow : Crisp Accountancy

You’re running a business, sales are coming in, and your revenue looks solid—so why does it always feel like there’s never enough cash in the bank?

If this sounds familiar, you’re not alone. Many profitable businesses struggle with cash flow, and it’s often because profit and cash flow are not the same thing.

In this blog, we’ll break down why this happens and, more importantly, how you can fix it.

Profit vs Cash Flow – What’s the Difference?

First things first—profit is what’s left after you’ve paid all your expenses. Cash flow, on the other hand, is the movement of money in and out of your business. You can be profitable on paper but still face cash flow issues if your money is tied up in unpaid invoices, stock, or long payment terms.

Here’s a quick example:

You sell £10,000 worth of products this month.
Your profit margin is 30%, so you should make £3,000 in profit.
But if customers take 90 days to pay, you won’t see that cash for three months.
Meanwhile, you still have to pay staff, suppliers, and rent.

See the problem? Your business is making money, but you’re struggling to access it when you need it.

The 7 Biggest Causes of Cash Flow Problems

1️⃣ Late Payments from Clients

You’ve done the work, sent the invoice, and now you’re waiting… and waiting. If clients take too long to pay, your cash flow suffers.
Fix: Implement clear payment terms, send automated reminders, and consider offering early payment discounts.

2️⃣ High Overheads

Just because your revenue is growing doesn’t mean your spending should, too. If your costs are creeping up, cash can disappear quickly.
Fix: Regularly review expenses and cut non-essential costs.

3️⃣ Poor Pricing Strategy

If your prices are too low, you may be covering costs but not generating enough cash to reinvest.
Fix: Review pricing and ensure you’re charging what you’re worth. (We cover this in our Profit Accelerator Workshop!)

4️⃣ Too Much Stock or Inventory

If you’ve got too much money tied up in stock, it’s sitting on shelves instead of in your bank account.
Fix: Use better forecasting to order only what you need and look at selling slow-moving stock.

5️⃣ Slow Sales Cycle

If it takes too long to convert leads into paying customers, cash flow suffers.
Fix: Speed up your sales process by improving follow-ups and making it easier for customers to buy.

6️⃣ Expensive Debt Repayments

If you’ve got high-interest loans or too many repayments, a chunk of your income might be going straight to lenders.
Fix: Renegotiate terms or consolidate debt to reduce monthly outgoings.

7️⃣ Rapid Growth Without Cash Reserves

Growing fast is exciting, but it can also drain your cash. More sales often mean more costs upfront before you get paid.
Fix: Plan ahead and ensure you have cash reserves to handle growth.

How to Get Better Control of Your Cash Flow

✅ Shorten Payment Terms – Get paid faster by reducing invoice due dates.
✅ Use Cash Flow Forecasting – Predict when money will come in and go out.
✅ Negotiate with Suppliers – Ask for better payment terms to ease pressure.
✅ Build a Cash Buffer – Aim to keep at least 3 months’ worth of expenses in reserve.
✅ Review Your Numbers Regularly – Don’t just check profits—track actual cash flow.

Need Help Fixing Your Cash Flow?

At Crisp Accountancy, we help businesses identify cash flow bottlenecks and put strategies in place to keep money moving. Our Profit Accelerator Workshop is designed to give you a clear plan to improve your cash flow and grow your profit.

Book a session with us today and take control of your cash flow!