In a business that sells mostly On account and carries their own receivables profits are taken when the sale is made -- not when the business gets paid.Since profit and loss are based on sales rather than collections, if collections are slow it is quite possible to be profitable and run out of cash.Hope this helpsJerry-the-bookkeeper
It happens. As small company need to pay first to get sales which means they need buy items for sale but in cash front without term . Bear with it, when getting better position, you may ask bankers help with a professional business plan. They will give you professional advise
