Why this matters
Here's a sentence that sounds impossible but happens constantly: a profitable business runs out of money and closes.
It's not a paradox. Profit and cash are two different things, and the gap between them is where businesses get caught out. You can have a great month on paper and still not be able to make payroll. Understanding why is one of the most important things you'll ever learn about running a business — because once you see the gap, you stop being surprised by it.
And if you use NuMetric, this matters even more directly: NuMetric records your revenue the moment you raise an invoice, not when the money arrives. So your profit will routinely run ahead of your bank balance. That's not an error — it's how proper accounting works — but it's exactly why you have to watch both numbers, not just one.
How to think about it
Profit is an accounting idea. It's the revenue you earned minus the costs you incurred — on paper, over a period. It answers: "did the business model work this month?"
Cash is what's actually in your bank account today. It answers: "can I pay what's due?"
Why they drift apart: accrual accounting
NuMetric — like most proper accounting systems — uses accrual-basis accounting. That means:
Revenue is recorded when you issue the invoice, not when the customer pays.
Costs are recorded when you incur them, not when you actually hand over the cash.
This is the correct, standard method, and for many businesses it's required. But it's the very thing that opens the gap between profit and cash. (Under a simpler cash-basis system, you'd only record money as it moved — and this gap would barely exist. NuMetric doesn't work that way, and for good reason: accrual gives you a truer picture of whether the business is actually working.)
On top of accrual timing, some big money movements never touch your profit & loss statement at all. Put together, the usual culprits are:
Invoices you've raised but haven't been paid for. This is the big one under accrual. The sale counts as profit the moment you invoice it — but the cash isn't in your account yet.
Stock you bought. The cash left your account, but it doesn't count as a cost until you actually sell the item. Money gone, no dent in profit yet.
Loan repayments and equipment purchases. These drain cash but mostly don't show up as expenses on the P&L — so a profitable month can still be a cash-down month.
Tax you've collected but not yet paid over. It's sitting in your bank account, so it looks like your money. It isn't. It belongs to the tax authority.
That last one is the sneakiest: healthy-looking cash that's actually a bill waiting to happen.
"Why does NuMetric show a profit I haven't been paid for?" Because NuMetric counts revenue when you invoice, not when you collect. If you've billed 10,000 JOD but only 4,000 has landed, your P&L still reflects the full 10,000 you earned. The other 6,000 isn't lost — it's sitting as accounts receivable on your balance sheet, waiting to be collected. Your profit is real; it just hasn't all turned into cash yet.
A worked example
Nadia runs a consultancy. Her P&L says she made 3,000 JOD profit last month. But her bank balance fell by 1,500 JOD. How?
Walk the difference:
She invoiced 10,000 JOD but clients only paid 6,000 so far. Because NuMetric records revenue when she invoices, all 10,000 counts toward her profit — but only 6,000 arrived as cash. The missing 4,000 is sitting in accounts receivable.
She repaid 2,000 JOD of a business loan → cash out, but loan principal isn't a P&L expense.
She bought a 1,500 JOD laptop → cash out, but it's an asset, not an immediate expense.
On paper: a solid, profitable month. In the bank: down 1,500, with a tax bill still building quietly in the background. Nadia isn't in trouble — her 4,000 in receivables is real money she'll collect — but if she'd assumed profit meant cash and spent accordingly, she could have been.
The lesson isn't that her profit was fake. It's that profit and cash answer different questions, and you have to watch both.
Your "cash reality check"
Before you celebrate a profitable month — or make a decision based on one — turn your accrual profit into a cash view. Take your profit, then set aside:
Invoices you're counting that haven't actually been paid (your receivables)
Any loan principal due soon
Tax you're holding that isn't really yours
Anything you've committed to buy (stock, equipment)
What's left is closer to the cash you can genuinely act on. The habit in one line: watch cash, not just profit — and never spend a profit you haven't collected.
Do this in NuMetric
Because NuMetric is accrual-based, your P&L shows what you've earned — so pair it with a cash view to see what you've actually got. Use Get the big picture to see profit and cash side by side, and Focus on customers to see exactly how much of your "profit" is still sitting in unpaid invoices, waiting to be collected. For the tax you're holding but haven't paid over, check Stay on top of taxes so it never catches you out.