Many entrepreneurs, freelancers or managers of small businesses often talk about Benefit And of Cash flow As if it were the same thing. However, these two financial indicators are very different and their confusion can lead to serious management errors.
In this article, we simply explain the difference, why it is essential and how to use these two concepts to better manage your business.
The benefit corresponds to Net result of your business.
-> In other words, it's the difference between your Revenues And your Loads (rents, employees, supplies, subscriptions, etc.), after taxes.
Example:
Benefit is a given Bookkeeper : it reflects the theoretical profitability of your business, but does not say whether you really have this money in your bank account.
The Cash flow, or cash flow, measures theMoney that actually comes in and out of your account.
Let's go back to the example above:
Result:
-> Cash flow is the operational reality that determines your ability to pay your bills, your employees or to invest.
Many profitable TPEs on paper are closing due to problems with Treasury.
In other words: You Don't Go Bankrupt for Lack of Profits, but for Lack of Cash.
💡 Knowing your cash flow allows you to:
To maintain a clear vision, combine the two approaches:
Simple tools like Klark Lite or management software now make it possible to track this data automatically and avoid unpleasant surprises.
