Karen Johnson CPA Professional Corp

A profitable business can still run out of cash!

It sounds contradictory, but it happens all the time.

A business can show a healthy profit and still struggle to make payroll, pay suppliers, cover loan payments, or meet tax obligations.
Why?

Because profit and cash flow are not the same thing.

Your cash may be tied up in receivables, inventory, equipment purchases, debt repayments, taxes, or growth that requires money today but will not generate cash until later.

That is why, from a CFO perspective, I would not stop at:
“Are we profitable?”

I would also ask:
- How quickly are customers paying us?
- What cash commitments are coming up over the next 30, 60 and 90 days?
- Is the business generating enough cash to support its growth?
- What happens if sales slow down or a major customer pays late?

Profit tells you how the business performed.

Cash flow tells you whether you can keep moving.

Before making your next big business decision, look beyond the bottom line.

Know your profit. Know your cash. You need both.

ugust 19 is almost here. That is when 50% U.S. tariffs are set to take effect on approximately US$20 billion of Canadian products.

Will they happen exactly as planned? We do not know.

But as a business owner, you should know how your business could respond if conditions change.

A few questions worth asking:

• What happens if revenue falls?
• What happens if costs increase?
• What happens if customers take longer to pay?
• How much of a cash cushion does the business really have?

No crystal balls around here. You do not need to predict the future.

You just need to understand your revenue, margins and cash flow well enough to know where the pressure points are and what options you have.

Know your numbers. Know your pressure points. Know your options.

✨ Tuesday Tax Tip ✨

Ever wondered which receipts are actually worth keeping when it comes to tax time? 📑

👉 Think:

Advertising & marketing 📰

Gas & travel 🚗

Meals & client meetings 🍽️

Office supplies & expenses 🖇️

✅ The better your record-keeping, the smoother your year-end will be. (And yes, CRA will thank you!)

🔗 Quick guide here: CRA Business Expenses https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html

💬 Don’t toss that shoebox just yet 😉 — instead, tell us in the comments: What’s the strangest receipt you’ve ever kept for taxes?

📞 And if you’d rather have a pro walk you through it, we’re only a call away.

✨Motivational Monday ✨

✨ Back to Business! September is the perfect time to reset your books, get organized, and set your cash flow up for success. At Karen Johnson CPA, we help small businesses clean up after summer so they can focus on growth. Who else is ready for a fresh start this fall? 🍂💼

“Is your business ready for a fractional controller? Here are 5 signs…”

“Check off more than two? It’s time we talk.”

"Hiring a full-time Controller can be costly and time-consuming. I’m Karen Johnson, CPA, and I offer fractional controllership — giving you big-picture financial guidance without the big salary. Flexible, experienced, and ready to step in right away." You can reach us by: Email: [email protected]
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- helpful hints for all business owners

Tip #53 - Tax Planning for Year-End 📅
As we approach the year-end, it’s time to review your tax strategies and maximize deductions. A little planning now can mean more savings in April.

Schedule your tax review with Karen Johnson CPA today at https://kjohnsoncpaprofcorp.ca/contact.

A Fractional CFO is a cost-effective solution for small to medium-sized businesses looking to enhance decision-making.
Our Fractional CFO services provide expert planning, financial reporting, internal control, and financing solutions—helping your business grow without the full-time expense.

Book your consultation today:

https://kjohnsoncpaprofcorp.ca/

- helpful hints for female entrepreneurs

Tip #52 - Create a Budget for Sustainable Growth 🌱
A well-thought-out budget helps prioritize your business goals and avoid overspending. It’s a roadmap for sustainable growth!

Need help setting one up? Let’s build a budget that supports your success! Book a consultation with Karen Johnson CPA at https://kjohnsoncpaprofcorp.ca/contact.