Where’s the Cash? (Part 1)

“I’m supposed to be making money. But look at my Profit & Loss statement. See that bottom line? Where are the dollars? They’re not in the bank! Is someone stealing from me?”

I can’t tell you how many times I’ve heard those exasperated words coming out of the mouths of small business owners. The answer is usually not that someone’s embezzling. (A notable exception is that client in southern California whom the accountant had bilked for $600,000-see posting Make Money, Happiness, Both or Neither.)

The reason for the missing cash – as is true for so many problems in…