Revenue is growing. EBITDA is ahead of budget. The order book is strong.

Yet cash is getting tighter.

It is one of the most common contradictions in growing businesses. A company can be profitable and commercially successful while simultaneously becoming more financially constrained.

The reason is simple: profit and cash are not the same thing.

Growth consumes cash

Imagine a business growing revenue from £50 million to £75 million.

That growth may require more inventory, additional employees, larger supplier commitments and greater investment. Meanwhile, customers may not pay for 60 or 90 days.

The P&L shows growth. The balance sheet is funding it.

This is why every growth strategy needs a corresponding cash strategy.

Small changes can have a big impact

Consider a £100 million revenue business where average debtor days increase from 45 to 60.

That additional 15 days represents approximately £4.1 million of revenue remaining uncollected for longer.

Nothing has necessarily changed in reported EBITDA, but millions of pounds of liquidity have effectively been tied up financing customers.

The same principle applies to inventory. Holding additional stock may protect customer service, but inventory is ultimately cash sitting on a shelf.

These aren’t simply finance KPIs. They are capital decisions.

Growth consumes cash

Imagine a business growing revenue from £50 million to £75 million.

That growth may require more inventory, additional employees, larger supplier commitments and greater investment. Meanwhile, customers may not pay for 60 or 90 days.

The P&L shows growth. The balance sheet is funding it.

This is why every growth strategy needs a corresponding cash strategy.

Small changes can have a big impact

Consider a £100 million revenue business where average debtor days increase from 45 to 60.

That additional 15 days represents approximately £4.1 million of revenue remaining uncollected for longer.

Nothing has necessarily changed in reported EBITDA, but millions of pounds of liquidity have effectively been tied up financing customers.

The same principle applies to inventory. Holding additional stock may protect customer service, but inventory is ultimately cash sitting on a shelf.

These aren’t simply finance KPIs. They are capital decisions.