Video · Short explainer video, a few minutes

Cash Flow vs. Profit: What's the Difference?

HBS Online · Harvard Business School Online (YouTube) Free Beginner

Cash Flow vs. Profit: What's the Difference?

If the difference between revenue and cash in the bank still feels fuzzy, a short visual walkthrough makes it click faster than any spreadsheet. This one keeps it plain for founders without a finance background: revenue is what you have earned on paper, cash flow is what has actually moved through your account. That single distinction is what stops the confusion in the question.

  • Revenue is booked when you deliver, not when the customer pays, so a profitable month can still leave your account empty.
  • Cash flow tracks the timing of money in and money out, which is what really keeps the lights on.
  • A business can be profitable and still run out of cash if payments arrive late.
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The question it answers

  1. What does healthy cash flow actually look like for a bootstrapped business, and how do I stop confusing revenue with money in the bank?

Read with it

  1. A behavioral, dead-simple cash-management system used by over a million businesses to stay permanently profitable. Perfect for... mikemichalowicz.com Book · book (~224 pages) Profit First: Transform Your Business from a Cash-Eating Monster Mike Michalowicz
  2. Once you accept that the spreadsheet lied about your cash, this template makes the timing gap concrete: you enter your real... The Startup Project Tool · Downloadable spreadsheet, 15 to 30 minutes to fill in Startup Runway Calculator Template (Excel and Google Sheets) The Startup Project
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