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Cash flow clarity

Why Cash Flow Matters More Than Profit in Your SME

You Can’t Spend Profit if There’s No Cash in the Bank

As an SME owner, it’s easy to feel encouraged by a profit figure on your income statement. But if you’re struggling to pay suppliers, meet payroll, or invest in your business, that “profit” quickly becomes meaningless.

The truth is: cash flow — not profit — is what keeps your business running. It’s the real-time movement of money in and out of your business that allows you to stay operational, avoid debt, and grow sustainably.

Let’s explore why cash flow deserves your full attention — and what you can do to manage it better.

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1

Profit Is a Snapshot — Cash Flow Is the Full Story

Profit is what’s left after expenses, but it doesn’t reflect when money is actually received or spent. You might have R100,000 in sales this month — but if your customers take 90 days to pay, your bank account tells a different story.

Your business can be “profitable” and still run out of cash.

2

Poor Cash Flow Is the Leading Cause of SME Failure

Most SMEs that shut down aren’t unprofitable — they just run out of cash. Late payments, unexpected expenses, and overextending credit can put serious pressure on your ability to cover day-to-day operations.

With strong cash flow management, you can keep your business stable even during tight months.

3

Cash Flow Tells You What You Can Actually Afford

Before hiring staff, buying stock, or upgrading equipment, cash flow gives you the real answer: Can you afford it now?

A profit number can’t answer that — but your cash flow statement can.

4

Knowing Your Cash Flow Lets You Plan Ahead

Cash flow forecasting helps you prepare for low-income months, budget for tax payments, and invest in growth at the right time. It gives you confidence and control over your financial future.

At SG&CO, we help SMEs build cash flow strategies that reduce surprises and keep you on track.

5

A Good Accountant Will Help You Optimise It

Cash flow management isn’t just about watching the numbers — it’s about understanding your business rhythms. When are your busy months? Who are your slowest-paying customers? Where are you overspending?

We help SMEs uncover those answers and create clear plans for improving their financial flow.

Don’t let profit figures fool you. Cash flow is what pays the bills, funds your growth, and keeps the lights on. If your business feels stretched even when the books say you’re doing well, it’s time to take a closer look at your cash flow.

SG&CO helps SMEs like yours turn confusion into clarity — and pressure into progress. Let’s talk about how to build a stronger, more resilient business.

Get in touch with SG&CO today.

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