Lesson 2 of 4 · Accounting Basics

Why a profitable month can empty the bank.

Profit and cash answer different questions, and the gap between them is where small businesses get caught. Drag the payment terms and watch the gap open.

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30 days
The profit and the money are the same sale, days apart. Every month you trade on terms, that gap is your bank balance.
Every step after the first is profit that never reached the bank, or cash that left without touching profit. A month that earned Rp 20,000,000 finishes Rp 7,000,000 down.

  • Profit and cash answer different questions

    Profit asks whether your prices and costs make sense over a period. Cash asks whether you can pay your bills today. A business can be profitable on paper and still have nothing in the bank.

  • A sale is revenue the moment you deliver, not when you get paid

    Sell Rp 10,000,000 on 30-day terms and Accounts Receivable rises with Sales Revenue immediately. The P&L shows the profit today; your bank account will not see the cash for a month.

  • Inventory locks up cash before it earns anything back

    Buying Rp 5,000,000 of stock moves cash into Inventory. It sits there as an asset, not an expense, until it sells, so a growing stockroom can drain a healthy bank balance before anyone notices.

  • Owner drawings reduce cash without ever touching profit

    Money taken as Prive (Owner's Drawings) never appears in Sales Revenue or expenses, so the P&L looks unaffected while the bank balance falls by exactly that much.

  • You pay Final Income Tax on revenue, not on cash collected

    On the accrual basis this kit teaches, revenue counts when you deliver, not when you are paid. So once an individual UMKM taxpayer has passed Rp 500 million of turnover for the year, PPh Final 0.5% falls due monthly on the turnover above that line as it is recognised, whether or not customers have paid. An unpaid invoice can still generate a real tax bill. Below that turnover nothing is due under this regime; on a strict cash-receipt basis the timing differs again. See Business Setup.

  • A deposit from a customer is cash before it is profit

    A customer prepayment lands in the bank immediately but is booked to Unearned Revenue, a liability, until you deliver. It inflates your cash balance well before it becomes profit.

  • A profitable month can still be a cash-negative month

    Rp 20,000,000 of profit sitting mostly in new receivables, plus Rp 8,000,000 spent restocking inventory and Rp 3,000,000 drawn as Prive, can leave the bank balance lower at month end than it was at the start.

  • Watch the Cash Flow Statement, not just the P&L

    The P&L tells you if the business model works. The Cash Flow Statement tells you if you can make payroll next week. Check both before deciding how healthy the business really is.