Why profit and cash flow differ

Check if your dental practice qualifies for capital allowances here >>> https://www.dentistswhoinvest.com/chris-lonergan

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UK Dentists: Collect your verifiable CPD for this episode here >>> https://courses.dentistswhoinvest.com/smart-money-members-club

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Feeling profitable but strangely broke? We dig into the hidden gap between production and collection that trips up so many UK dentists, then show how to fix it with clean bookkeeping, correct revenue recognition, and a simple 13-week cash forecast. You’ll hear why tax hits in late December and January drain liquidity, how deposits can inflate reported profit and accelerate tax, and what it takes to line up costs with completed treatment so your numbers tell the truth.

Together we reframe the whole picture: profit is teeth, cash flow is gums, and both must be healthy. We break down common accounting mistakes in Xero and QuickBooks, explain when revenue should be recognised, and map out a weekly process to track net cash collected versus total outflows, including assets and loan payments. You’ll learn to ringfence working capital for the next 90 days, set aside tax with confidence, and identify genuine excess cash you can deploy into growth without fear.

We also tackle mindset and habit. When the bank balance is high, owners overspend; when it’s low, panic kicks in. Data replaces emotion. With a living forecast, you can choose the right lane for your practice, avoid nasty surprises, and time investments like scanners, marketing, or training to match your cash runway. If you’ve ever asked “Why do I feel broke when my accounts show profit?”, this conversation gives you the clarity, language, and tools to change it.

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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.

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