Your P&L may show profit—but cash is tight. Depreciation is a non-cash expense that reduces profit on paper but doesn't affect your bank account. When the P&L looks fine but cash is tight, you need to understand the gap and what options exist. Here's what to know.
Why Depreciation and Cash Diverge
You bought equipment years ago. Depreciation spreads that cost over time on the P&L. But you don't pay depreciation—you paid for the equipment when you bought it. Your cash flow reflects actual inflows and outflows. See why profitable restaurants struggle with cash and restaurant cash flow management. For planning future equipment and renovations, restaurant cap ex planning helps. Restaurant cash advance or working capital can bridge gaps when P&L and cash don't align.
Real Example: The Profitable but Cash-Strapped
A restaurant showed $5,000 profit on the P&L. But they had a loan payment, equipment replacement reserve, and seasonal inventory build-up. Cash was short. They used restaurant working capital to bridge the gap. Understanding the difference between profit and cash helped them plan.
Managing the Profit vs Cash Gap
Track cash flow separately from P&L. Understand what's non-cash (depreciation, amortization) vs. actual outflows. Plan for loan payments, cap ex, and seasonal build-up. Know your funding options.
Bottom Line
Profit and cash are different. Depreciation doesn't affect cash. Restaurant funding can bridge gaps when P&L looks fine but cash is tight. Many providers fund in 24–48 hours.
Frequently Asked Questions
Why does my P&L show profit but I have no cash?
Depreciation and other non-cash expenses reduce profit on paper but don't affect your bank account. Loan payments, cap ex, and timing of receipts do.
Can restaurant funding help when profit and cash diverge?
Yes. Restaurant funding can bridge gaps when your P&L looks fine but cash flow is tight due to timing or non-cash items.
How do I track profit vs cash?
Use a cash flow statement. Track actual inflows and outflows. Understand what's non-cash on your P&L.