Episode 4 – Why Cash in the Bank Matters More Than Profit on Paper

Profit is theory. Cash is real.

Episode Summary

Your Profit & Loss says you made money.

But your bank account says otherwise.

In this episode, Amanda breaks down the difference between profit and cash flow — and why cash in the bank is what actually keeps your trade business stable.

Because you can be “profitable” on paper and still feel stressed every week trying to make payroll.

And that’s a cash flow problem.

In This Episode, We Cover:

✔ Why profit doesn’t automatically mean financial security

✔ The common end-of-month trap tradies fall into

✔ Why cash flow issues sink good businesses

✔ The stress cycle that starts when cash gets tight

✔ What healthy cash flow actually looks like

✔ Simple bank account structures that protect your business

✔ A small action you can take this week to regain control

The Common Scenario

Your P&L shows a $12k profit.

But your bank balance is sitting at $1,800.

Fuel bills are due.

Wages are coming up.

Clients haven’t paid yet.

This is where many tradies feel like they’re working flat out but never getting ahead.

Why It Matters

You can’t pay suppliers with a profit report.

You can’t pay wages with accounts receivable.

Cash in your bank account is what:

• Pays the bills
• Reduces stress
• Keeps growth moving
• Gives you breathing room

Without it, even a “profitable” business feels chaotic.

What Good Looks Like

Healthy cash flow means:

• You know exactly how much cash you need each week
• You’ve got separate bank accounts (GST, wages, tax, etc.)
• You set aside a percentage from every payment
• You have visibility over what’s coming in and going out
• You’ve built a buffer to handle slow payers or surprises

It’s not complicated.

It’s just consistent.

This Week’s Action Step

Open a second (or third) bank account.

Name it:

• “Bills”
• “GST”
• “Don’t Touch”

Next time money comes in, transfer 30% immediately.

And if you’ve already got a tax account sitting there empty — start using it.

Small habit. Big difference.

The Bottom Line

Being profitable doesn’t mean you’re safe.

Cash in the bank is what gives you options, lowers stress, and lets you step away from the business without panic.

If cash flow feels messy or confusing, this is exactly what we help tradies sort at Virtual Coastie.

You can absolutely do it yourself.

Or you can get it set up properly and move on.

🔧 Learn more at: www.virtualcoastie.co.nz

🎧 Follow Hey Tradies! so you don’t miss the next episode.

Catch you next time.