Explain to a client why profit and cash don’t match

---
name: explain-profit-vs-cash
description: "Use when a business owner asks why they made a profit but have no cash, and the user wants a plain-English reply built from the client’s own numbers as a bridge from net income to the change in cash. Triggers: profit vs cash, where did the money go, cash flow explanation for a client."
---

# Explain to a client why profit and cash don’t match

Answer “we made money, so where is it?” in plain English, using the client’s own numbers, in a reply you can send.

## When to use it

The most common question a small-business owner asks their accountant. The answer is always a bridge from net income to the change in cash: receivables, inventory, payables, loan payments, owner draws, equipment. The work is doing it with their numbers, in words they'll follow.

The assistant does the bridge and the words. You check that the bridge ties.

**Where it works.** Works in Claude, ChatGPT, Copilot or any AI assistant. No setup.

## Ask the user for

- Net income for the period.
- Beginning and ending balances for cash, receivables, inventory, payables, loans and equipment, or the balance sheet at both dates.
- Owner draws or distributions in the period.
- The client’s question in their own words, if you have it.

Ask for anything missing before you start. Never invent a figure to fill a gap.

## Do this

Carry out the request below. Fill each [bracketed] item from what the user gave you.

A client asked: "[their question, e.g. We made $80,000 this year, so why is there only $12,000 in the bank?]"

Using the numbers below, write a reply I can send them.

1. Start with a bridge from net income to the change in cash, one line per item, largest first. Each line needs a plain-English label ("customers owe you more than they did in January") and the amount.
2. Check that the bridge adds up to the actual change in cash. If it doesn't, stop and tell me the gap instead of writing the reply.
3. Then write the reply: short, friendly, no accounting terms unless you explain them in the same sentence. End with the one or two items that are worth doing something about.

Numbers:
[paste]

## Before you hand it over

Tell the user which of these checks they still need to make:

- Confirm the bridge ties to the actual change in cash before anything is sent.
- Read the reply as the client would. If a sentence could be misread as advice you don’t mean to give, change it.
- Remove anything the client shouldn’t see, such as notes about other clients or your working.

The assistant drafts. The person whose name is on the work approves it.

## What a good answer looks like

**Bridge (check: ties to the $9,000 increase in cash)**
- Net income: +80,000
- Customers owe you more than in January (receivables up): −31,000
- New van: −28,000
- Paid down the equipment loan: −9,000
- Owner draws: −24,000
- You owe suppliers more than in January (payables up): +21,000
- **Change in cash: +9,000**

**Reply**

You did make $80,000. Most of it is sitting in three places. $31,000 is money customers owe you that hasn't come in yet. $28,000 went into the new van, and $9,000 paid down its loan. You also took $24,000 out during the year. Offsetting some of that, you owe suppliers $21,000 more than you did in January.

The one to look at is the $31,000. If your larger customers paid on time, most of that would be in the bank.

---

From the Harbinger FinLab skill library: https://harbinger.finance/skills/explain-profit-vs-cash