{"id":1410,"date":"2024-01-09T20:43:49","date_gmt":"2024-01-09T20:43:49","guid":{"rendered":"https:\/\/www.cloudcontroller4hire.com\/?p=1410"},"modified":"2024-01-24T17:49:30","modified_gmt":"2024-01-24T17:49:30","slug":"cash-flow-vs-profit-understanding-the-difference","status":"publish","type":"post","link":"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/","title":{"rendered":"Cash Flow vs Profit: Understanding the Difference"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1410\" class=\"elementor elementor-1410\">\n\t\t\t\t\t\t<section data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-section elementor-top-section elementor-element elementor-element-60b4422 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"60b4422\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-4d59701\" data-id=\"4d59701\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-section elementor-inner-section elementor-element elementor-element-59d9f71 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"59d9f71\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-71391b5\" data-id=\"71391b5\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a13a0e3 elementor-widget elementor-widget-image\" data-id=\"a13a0e3\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.20.0 - 26-03-2024 *\/\n.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=\".svg\"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}<\/style>\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/elementor\/thumbs\/quickbooks-brand-preferred-logo-50-50-black-external-qi2loqssq6r3okwhqit1w7qjkhigr6qghixfnheccc.png\" title=\"quickbooks-brand-preferred-logo-50-50-black-external\" alt=\"quickbooks-brand-preferred-logo-50-50-black-external\" loading=\"lazy\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ab759f9 elementor-widget elementor-widget-text-editor\" data-id=\"ab759f9\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.20.0 - 26-03-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Cash flow and profit aren\u2019t the same thing. Although the two have overlapping characteristics,<br \/>it\u2019s important to understand the differences to make informed business decisions and navigate<br \/>your business to success.<\/p><p><br \/>In this article, we\u2019ll explore the differences between cash flow and profit and discuss how these<br \/>two items are related. By the end of this article, you should have the knowledge to use both<br \/>concepts in your business.<\/p><p><br \/><strong>What is Cash Flow?<\/strong><br \/>Cash flow monitors the transactions in your bank account. Deposits, or money coming in, are<br \/>known as cash inflows, while outgoing transactions, or expenses, are outflows. A positive cash<br \/>flow indicates your company is earning more than you are spending. On the contrary, a negative<br \/>cash flow highlights that expenses are exceeding revenue.<br \/>Cash flow is commonly monitored through accounting software, like QuickBooks Online, that<br \/>updates in real-time for transactions. This is because it can take days, or even weeks, for certain<br \/>transactions to clear your bank account. For example, <strong>if you write a check, how long does it take<\/strong><br \/><strong>to clear?<\/strong> Although the funds are still in your bank account for the next few days, you need to<br \/>factor that expense into your checking account to avoid overdrafting.<\/p><p><br \/><strong>What is Profit?<\/strong><br \/>Profit is the money your business earns during a specific time frame. Profit is found by taking<br \/>your revenue minus all expenses. There are different forms of profit. Gross profit is how much<br \/>money your business makes after subtracting direct expenses, also known as cost of goods sold,<br \/>from revenue. Net profit, also known as net income, is the overall profit after subtracting direct<br \/>and indirect expenses from revenue. Accounting software, like QuickBooks Online, calculates<br \/>both forms of profit on the profit and loss statement.<br \/>If you earn $10,000 in profit, that doesn\u2019t always mean that your checking account increased by<br \/>$10,000. In fact, transactions that hit your checking account don\u2019t always flow through to the<br \/>income statement. For example, if you made a loan payment, only the interest portion of the<br \/>payment will go to the income statement. This is one of the primary differences between profit<br \/>and cash flow.<\/p><p><br \/><strong>How are Cash Flow and Profit Intertwined?<\/strong><br \/>Cash flow tracks the movement of money in your business, while profit illustrates how much<br \/>money you have left over after all of your costs. Many of the cash inflows and outflows that<br \/>move through your checking account will hit the income statement and impact your profit;<br \/>however, some payments, like prepaids and loan payments, don\u2019t.<br \/>In addition, there can be non-cash transactions that flow through to the income statement, like<br \/>amortization and depreciation. These items don\u2019t come out of the checking account. This is why<\/p><p>it\u2019s important that you track cash flow and profit separately in QuickBooks Online. Just because<br \/>your income statement shows $15,000 of profit, doesn\u2019t mean you have $15,000 to spend.<\/p><p><br \/><strong>Getting Started<\/strong><br \/>Both cash flow and profit infuse transparency into your operations and can help you make more<br \/>informed business decisions.<\/p><p><strong>How do you track each?<\/strong><\/p><p>If you are still struggling to differentiate<br \/>between cash flow and profit or want customized solutions for improving your business\u2019s<br \/>financial health, reach out to a team member today to learn more about how we can help.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-e65a823\" data-id=\"e65a823\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a235c9d elementor-widget elementor-widget-spacer\" data-id=\"a235c9d\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.20.0 - 26-03-2024 *\/\n.elementor-column .elementor-spacer-inner{height:var(--spacer-size)}.e-con{--container-widget-width:100%}.e-con-inner>.elementor-widget-spacer,.e-con>.elementor-widget-spacer{width:var(--container-widget-width,var(--spacer-size));--align-self:var(--container-widget-align-self,initial);--flex-shrink:0}.e-con-inner>.elementor-widget-spacer>.elementor-widget-container,.e-con>.elementor-widget-spacer>.elementor-widget-container{height:100%;width:100%}.e-con-inner>.elementor-widget-spacer>.elementor-widget-container>.elementor-spacer,.e-con>.elementor-widget-spacer>.elementor-widget-container>.elementor-spacer{height:100%}.e-con-inner>.elementor-widget-spacer>.elementor-widget-container>.elementor-spacer>.elementor-spacer-inner,.e-con>.elementor-widget-spacer>.elementor-widget-container>.elementor-spacer>.elementor-spacer-inner{height:var(--container-widget-height,var(--spacer-size))}.e-con-inner>.elementor-widget-spacer.elementor-widget-empty,.e-con>.elementor-widget-spacer.elementor-widget-empty{position:relative;min-height:22px;min-width:22px}.e-con-inner>.elementor-widget-spacer.elementor-widget-empty .elementor-widget-empty-icon,.e-con>.elementor-widget-spacer.elementor-widget-empty .elementor-widget-empty-icon{position:absolute;top:0;bottom:0;left:0;right:0;margin:auto;padding:0;width:22px;height:22px}<\/style>\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1afc57a elementor-widget elementor-widget-image\" data-id=\"1afc57a\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"800\" src=\"https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2024\/01\/Forecast-1024x1024.jpg\" class=\"attachment-large size-large wp-image-1413\" alt=\"Cash Flow vs Profit: Understanding the Difference\" srcset=\"https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2024\/01\/Forecast-1024x1024.jpg 1024w, https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2024\/01\/Forecast-300x300.jpg 300w, https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2024\/01\/Forecast-150x150.jpg 150w, https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2024\/01\/Forecast-768x768.jpg 768w, https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2024\/01\/Forecast.jpg 1080w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Cash flow and profit aren\u2019t the same thing. Although the two have overlapping characteristics,it\u2019s important to understand the differences to make informed business decisions and navigateyour business to success. In this article, we\u2019ll explore the differences between cash flow and profit and discuss how thesetwo items are related. By the end of this article, you [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v16.9 (Yoast SEO v20.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Cash Flow vs Profit: Understanding the Difference - Controller4Hire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cash Flow vs Profit: Understanding the Difference\" \/>\n<meta property=\"og:description\" content=\"Cash flow and profit aren\u2019t the same thing. Although the two have overlapping characteristics,it\u2019s important to understand the differences to make informed business decisions and navigateyour business to success. In this article, we\u2019ll explore the differences between cash flow and profit and discuss how thesetwo items are related. By the end of this article, you [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/\" \/>\n<meta property=\"og:site_name\" content=\"Controller4Hire\" \/>\n<meta property=\"article:published_time\" content=\"2024-01-09T20:43:49+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-01-24T17:49:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/elementor\/thumbs\/quickbooks-brand-preferred-logo-50-50-black-external-qi2loqssq6r3okwhqit1w7qjkhigr6qghixfnheccc.png\" \/>\n<meta name=\"author\" content=\"Arta\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Arta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/\",\"url\":\"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/\",\"name\":\"Cash Flow vs Profit: Understanding the Difference - Controller4Hire\",\"isPartOf\":{\"@id\":\"https:\/\/www.cloudcontroller4hire.com\/#website\"},\"datePublished\":\"2024-01-09T20:43:49+00:00\",\"dateModified\":\"2024-01-24T17:49:30+00:00\",\"author\":{\"@id\":\"https:\/\/www.cloudcontroller4hire.com\/#\/schema\/person\/fcae4cb1d8a98aedd406f97d88d06666\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.cloudcontroller4hire.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Cash Flow vs Profit: Understanding the Difference\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.cloudcontroller4hire.com\/#website\",\"url\":\"https:\/\/www.cloudcontroller4hire.com\/\",\"name\":\"Controller4Hire\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.cloudcontroller4hire.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.cloudcontroller4hire.com\/#\/schema\/person\/fcae4cb1d8a98aedd406f97d88d06666\",\"name\":\"Arta\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.cloudcontroller4hire.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/c8a579bb55a0f45e970e4ce595a900e8?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/c8a579bb55a0f45e970e4ce595a900e8?s=96&d=mm&r=g\",\"caption\":\"Arta\"},\"sameAs\":[\"https:\/\/www.cloudcontroller4hire.com\"],\"url\":\"https:\/\/www.cloudcontroller4hire.com\/author\/firoz\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Cash Flow vs Profit: Understanding the Difference - Controller4Hire","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/","og_locale":"en_US","og_type":"article","og_title":"Cash Flow vs Profit: Understanding the Difference","og_description":"Cash flow and profit aren\u2019t the same thing. Although the two have overlapping characteristics,it\u2019s important to understand the differences to make informed business decisions and navigateyour business to success. In this article, we\u2019ll explore the differences between cash flow and profit and discuss how thesetwo items are related. By the end of this article, you [&hellip;]","og_url":"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/","og_site_name":"Controller4Hire","article_published_time":"2024-01-09T20:43:49+00:00","article_modified_time":"2024-01-24T17:49:30+00:00","og_image":[{"url":"https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/elementor\/thumbs\/quickbooks-brand-preferred-logo-50-50-black-external-qi2loqssq6r3okwhqit1w7qjkhigr6qghixfnheccc.png"}],"author":"Arta","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Arta","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/","url":"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/","name":"Cash Flow vs Profit: Understanding the Difference - Controller4Hire","isPartOf":{"@id":"https:\/\/www.cloudcontroller4hire.com\/#website"},"datePublished":"2024-01-09T20:43:49+00:00","dateModified":"2024-01-24T17:49:30+00:00","author":{"@id":"https:\/\/www.cloudcontroller4hire.com\/#\/schema\/person\/fcae4cb1d8a98aedd406f97d88d06666"},"breadcrumb":{"@id":"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.cloudcontroller4hire.com\/cash-flow-vs-profit-understanding-the-difference\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.cloudcontroller4hire.com\/"},{"@type":"ListItem","position":2,"name":"Cash Flow vs Profit: Understanding the Difference"}]},{"@type":"WebSite","@id":"https:\/\/www.cloudcontroller4hire.com\/#website","url":"https:\/\/www.cloudcontroller4hire.com\/","name":"Controller4Hire","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.cloudcontroller4hire.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.cloudcontroller4hire.com\/#\/schema\/person\/fcae4cb1d8a98aedd406f97d88d06666","name":"Arta","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.cloudcontroller4hire.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/c8a579bb55a0f45e970e4ce595a900e8?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/c8a579bb55a0f45e970e4ce595a900e8?s=96&d=mm&r=g","caption":"Arta"},"sameAs":["https:\/\/www.cloudcontroller4hire.com"],"url":"https:\/\/www.cloudcontroller4hire.com\/author\/firoz\/"}]}},"_links":{"self":[{"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/posts\/1410"}],"collection":[{"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/comments?post=1410"}],"version-history":[{"count":8,"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/posts\/1410\/revisions"}],"predecessor-version":[{"id":1424,"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/posts\/1410\/revisions\/1424"}],"wp:attachment":[{"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/media?parent=1410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/categories?post=1410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cloudcontroller4hire.com\/wp-json\/wp\/v2\/tags?post=1410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}