Profit is an opinion; cash is a fact. An interior design firm was profitable yet funded by its owner's own pocket — until we changed payment timing, and nothing else.
Few things confuse an owner more than a statement showing profit while the account cannot cover payroll. The gap is usually not an accounting error. It is timing.
The difference in one line
Profit is recorded when you invoice. Cash arrives when you collect. If customers pay at 90 days and suppliers demand immediate payment, you fund that gap personally no matter how profitable you are.
The problem was never revenue. It was payment timing.
A worked case
An interior design startup running seasonal projects had 100% negative cash flow, covered out of the owner's own pocket. We gathered the contracts, the actual payment dates and the supplier invoices, and a 30–60 day gap appeared.
We tested five payment scenarios. The best was 30% upfront, 40% on delivery, 30% after a month. Contracts were amended, suppliers renegotiated, and we built a daily cash forecast with a 90-day horizon.
- Cash flow: from -100% to +15%
- Owner funding: from 100% down to 30%
- Three new projects adding SAR 450K in profit
Where to start
Collect your contracts and your actual collection dates — not the agreed ones — and set them against your supplier payment terms. The gap that appears is the financing you pay out of pocket every month without calling it that.
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