You check your Profit & Loss (P&L) statement, and it shows a solid net profit. But then you look at your bank account, and the cash just isn’t there. Where did it go?
This is a common—and frustrating—situation for many bridal shop owners. The good news? The answers are there. You’re just looking in the wrong place.
Your P&L tells part of the story, but your balance sheet holds the rest. If your bank balance doesn’t match your profit, here’s where to look.
Your balance sheet tracks assets, liabilities, and equity—things that impact cash flow but don’t show up as expenses on your P&L. These are the biggest culprits when profit and cash don’t align:
Loan payments are made up of two parts:
Every time you pay down your loan principal, you’re reducing a liability—but you’re also reducing your cash balance.
The impact? If you’ve been aggressively paying off debt, that could explain why your bank account feels drained despite showing a profit.
Have you taken money out of your business for personal use? That money doesn’t count as an expense, so it won’t show up on your P&L.
Instead, owner draws, dividends, or distributions:
The impact? If you’re paying yourself without tracking it as part of your cash flow planning, your bank balance might look a lot lower than expected.
Bridal shops operate differently than most businesses because inventory isn’t an expense—it’s an asset.
The impact? If your stock ties up that cash on the balance sheet without it reflecting as an expense. That money is sitting in your gowns, not your bank account.
If your P&L shows a profit, but your bank account says otherwise, don’t panic. Your balance sheet holds the answers.
The solution? Track both profitability (P&L) and cash flow (balance sheet) together. This full-picture view helps you plan better, manage your finances wisely, and avoid cash flow surprises.
Next step: Take a look at your balance sheet today. Where’s your cash really going?
Need help? We can do a Profit Assessment for you to help you understand your true financial position!