Cash Flow, Not Just Profit: Keep Your Business Liquid This Summer

 Written By: your slightly sunburned, spreadsheet-wielding Canadian Bookkeeper.

Ah, summer in Canada. The snow has melted (mostly), the patios are packed, and we’re all pretending mosquitoes aren’t a thing. But while everyone else is planning lake trips and BBQs, I’m over here asking one of life’s most important questions: how’s your cash flow?

Yep, that’s right. Cash flow. Not the sexiest phrase at the summer picnic, I’ll admit. But trust me, it’s more important than SPF 50 on a July long weekend. You might feel rich because your profit and loss statement says you made a boatload, but if your bank account is emptier than the office on a Friday afternoon? We’ve got a problem.

Let’s break it down – bookkeeper style. With jokes. And feelings. And possibly a cold drink in hand.

 

Profit is a Liar (Sometimes)

Let’s start with a harsh truth: Profit is a fickle drama queen. She loves to show up on paper looking wonderful – “Look at me, I’m net income! I’m impressive!” – but, behind the scenes, she’s quietly ghosted your bank account. How? Easy:

·         You’ve invoiced $10,000, but the client is on “vacation” until September.

·         You bought inventory, but it’s still sitting in a warehouse like a moody teenager refusing to come out of their bedroom.

·         You paid your rent, hydro, and surprise air conditioner repair – in cash.

 Meanwhile, your bank balance is like, “Bro, I have $400 and a Metro gift card.”

 Cash Flow: The Unsung Hero of Business Survival

Cash flow is the actual money moving in and out of your business. It’s the heartbeat, the lifeblood, the butter on your toast. (Sorry, it’s lunchtime.) If you’ve got healthy cash flow, you can pay your bills, your team, and yes, even yourself – on time.

 Think of profit as a beach selfie.

Cash flow is whether you remembered to bring your wallet to buy ice cream.

 Summer Cash Flow Woes: A Canadian Reality

Let’s be honest, Canadian summers are gorgeous – but short. Your clients? On vacation. Your suppliers? Also on vacation. Your customers? Spending money on camping gear and festivals instead of your very logical, sensible product.

 Result? Cash comes in slooooooow. Bills? Not so much. Hydro, CRA, and your landlord don’t care that it’s cottage season.

 Tips to Keep Your Cash Flow Chill (Like a Freezer Full of Popsicles)

·         Invoice FAST, Follow Up FASTER

o   Send invoices like they’re time sensitive Maple Leafs tickets. And don’t be afraid to nudge people like a polite Canadian goose. “Hey, just circling back on that invoice…eh?”

·         Offer Early Payment Discounts

o   “Pay in 10 days and save 2%” might just be the incentive that gets your invoice off their desk and into the paid pile.

·         Delay Non-Essential Expenses

o   Do you really need that new ergonomic chair with built-in massage and cup holder right now? Or can it wait till the fall?

·         Forecast Like a Weather App

o   Create a cash flow forecast and review it regularly. Sure, it won’t always be right (like the weather in Nova Scotia), but it helps you plan for dry spells.

·         Line of Credit = Business Life Jacket

o   Have one in place before you need it. Because once you’re underwater, it’s a lot harder to convince a bank that you’re just “a little damp.”

 Final Thoughts from the Ledger Lounge

Profit is great for bragging. “Look at my net income!” you shout while sipping cold brew. But cash flow is what pays the barista. This summer, don’t get caught looking profitable on paper but broke in real life.

Keep things liquid, keep things lean, and remember: your friendly Canadian bookkeeper is always here to help you ride out the summer slump – with a calculator in one hand and a melting popsicle in the other.

Cheers to staying, staying paid, and maybe even sneaking in a long weekend. You earned it, bud!