In this video, I discuss why there’s a discrepancy between the profit reported on Bob’s Profit and Loss statement, which is $21,000, and the actual amount in his bank account, which is only $17,000. I highlight key factors such as Bob’s drawings of $13,500 and loan payments that include only the interest portion as tax-deductible. It’s important to understand that not all expenses affecting cash flow appear on the profit and loss statement. I encourage you to review your balance sheet and consider how your drawings and loan payments impact your cash flow. If you haven’t already, please check out the recording about what your accountant categorizes as drawings for further clarity.
If that’s my profit, why isn’t it in my bank account?
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