Our project is profitable on paper but has no cash. Why?
Profit-cash confusionRevenue, invoicing, collection, and cash outflow are different events. Build a timing view of expected receipts and payments, and involve finance in any funding decision.
What to do now
- Separate earned, invoiced, and collected amounts
- Map supplier and payroll payment timing
- Identify upcoming cash gaps
- Agree collection and funding actions with finance
When to escalate
Escalate when
A payment obligation cannot be met from confirmed available funds.
Who decides
The budget owner and authorized finance representative
Example
A milestone is invoiced this month but payable later, while subcontractor costs fall due earlier.
Mistake to avoid
Treating an issued invoice as cash already received.
Prevent a repeat
Review remaining cost and commitments, not only money already spent; reconcile with the authorized finance source.
Related cases
- How can we tell whether a budget variance is temporary or permanent?Variance timing ambiguity
- What financial checks belong in project closure?Incomplete financial closeout
- My team confuses effort with duration. How should we estimate?Effort-duration confusion
- How do we measure PMO effectiveness?PMO activity-versus-outcome confusion