ACV Consulting Services

𝐂𝐚𝐬𝐡𝐟𝐥𝐨𝐰 𝐯𝐬. 𝐏𝐫𝐨𝐟𝐢𝐭: 𝐖𝐡𝐲 𝐌𝐚𝐧𝐲 𝐍𝐢𝐠𝐞𝐫𝐢𝐚𝐧 𝐒𝐌𝐄𝐬 𝐀𝐫𝐞 𝐂𝐨𝐧𝐟𝐮𝐬𝐞𝐝

Most business entrepreneurs always mention something potentially risky:

"We made a profit last month, so we're fine."

But a few weeks later,

They cannot pay suppliers.
Staff salaries have been delayed.
Rent is due.

So, what happened?

Let us break it down simply.

𝐏𝐫𝐨𝐟𝐢𝐭

Profit is the amount that remains after deducting expenses from income.

It is included in your financial statements.

This includes:
• Sales done with credit
• Expenses incurred but not paid.
• Depreciation (a non-cash cost)

Profit is an accounting figure.

𝐂𝐚𝐬𝐡𝐟𝐥𝐨𝐰

Cashflow refers to the actual movement of money into and out of your bank account.

It answers a single question:

Do you currently have cash on hand?

Only money received and paid are important to cashflow.

No assumptions. No accruals.

𝐓𝐡𝐞 𝐑𝐞𝐚𝐬𝐨𝐧𝐬 𝐒𝐌𝐄𝐬 𝐁𝐞𝐜𝐨𝐦𝐞 𝐂𝐨𝐧𝐟𝐮𝐬𝐞𝐝

1️⃣ Although you made sales, the buyers have not yet paid.
(A profit was noted. No money was received.)

2️⃣ You purchased stock in large quantities.
(The money is gone. Profit is not yet impacted.)

3️⃣ An old supplier debt was settled.
(Cash decreased. No impact on the present profit.

4️⃣ Your collections are low and your receivables are high.
(Books appear attractive. The bank account appears to be empty.

The harsh reality is this:

It is possible for a profitable business to fail.

Because cash flow problems, not a lack of profit, are the reason why firms fail.

For this reason, monthly reporting that is structured is important:
• Statement of Profit and Loss
• Statement of Cash Flow
• Monitoring of accounts receivable
• Management of accounts payable

Most Nigerian SMEs just check their bank balances.

Serious business operators keep track of both profits and cash flows.

If you don't know the distinction, you can make smart sales decisions but result in terrible cash flow.

𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐜𝐥𝐚𝐫𝐢𝐭𝐲 𝐢𝐬𝐧'𝐭 𝐚 𝐥𝐮𝐱𝐮𝐫𝐲.

𝐈𝐭'𝐬 𝐚 𝐬𝐮𝐫𝐯𝐢𝐯𝐚𝐥 𝐭𝐨𝐨𝐥.

May this month be a month of divine speed, intervention, breakthrough and success on every activities of your life.

Happy new month FAM 😘😘

Cheers to a new month! May this month be filled with accomplishments, peace, and positive surprises for you. Thank you for allowing us to serve you – here’s to creating more value and success this month.

Happy new month FAM 😘😘😘

This new month, invest wisely, save costs and grow your wealth by engaging the services of an accountant.

Happy new month FAM

Your No.1 bus stop for accounting services😊.

A lot of companies and businesses are in full operation but lack the capability to handle their finances, either as a result of lack of experienced expertise or as a result of the inability to afford staffs to handle their finances.

ACV Financial Services is here to make it easy for businesses and firms to operate their business without any accounting concerns.

You can always reach out to us for outsourcing of your accounting or financial services.

Our services include:
Bookkeeping,
Bank, Account payable and account receivable reconciliations,
General ledger postings,
Setting up your accounting softwares,
Financial Modeling, etc.

Your No. 1 bus stop for financial services.

Contact us today let's deal 🤝