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The "Profit Paradox": Why You Have Taxable Income but No Cash
This is the "Profit Paradox," and it is the most confusing concept for business owners. You look at your Profit & Loss (P&L) statement, and your CPA tells you that you made $100,000 in profit this year. You are excited until you look at your bank balance and see $5,000. You panic. Where did the money go? Why does my P&L show a profit when I have no money? The answer usually lies in the critical difference between "Accounting Profit" and "Real Cash." Profit is simply an accoun

Support Team
Dec 9, 20253 min read
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