Making Money But Always Broke? Here’s Where Your Profits Disappear, and How to Fix It

Kim Bernstein
Aug 4
2 min read

You’re making sales, sending invoices, and getting paid. But your bank balance still looks suspiciously low. If you’ve ever thought, “I know I’m making money… so why am I still broke?”, you’re not alone.

The truth is: sales don’t equal cash flow. Until you understand where your money is disappearing, your business will always feel like it’s running on fumes.

Where Your Money Is Hiding

Here are the most common culprits:

High Overhead Costs Rent, utilities, insurance, and software subscriptions can quietly eat away at your profits before you even see them.
Debt Payments Credit cards, business loans, and equipment leases drain monthly cash flow quickly.
Untracked “Invisible” Expenses Small recurring charges, like $12 monthly apps, coffee meetings, or unlogged supply purchases, add up faster than you think.
Inventory or Materials If you buy in bulk, your cash could be tied up in products or materials sitting on a shelf.
Unpaid Taxes If you’re not setting aside money for taxes, your account balance can trick you into thinking you have more cash than you do, until tax time hits.

The Illusion of Profit

Your sales numbers might look great, but that doesn’t mean you’re keeping most of it.

Example: You bring in $10,000 in sales this month: $4,000 goes to rent, payroll, and utilities $1,500 to debt payments $500 to software and supplies $2,000 set aside for taxes Suddenly, your “$10,000” feels more like $2,000, and that’s before you even pay yourself.

This is why a Profit & Loss statement (P&L) is your best friend. It shows you the real profit after expenses, not just the top-line revenue.

How to Stop the “Where Did It Go?” Cycle

Track Every Dollar Use bookkeeping software to log all expenses, yes, even that $5 coffee on the way to a client meeting.
Review Your Numbers Monthly Don’t wait until tax season. Look at your P&L every month to catch overspending before it snowballs.
Set Expense Limits Give every category (marketing, supplies, subscriptions) a maximum budget and stick to it.
Separate Business & Personal Accounts Keep your finances clean and avoid the confusion of mixing funds.
Pay Taxes Monthly Treat tax savings like a non-negotiable bill so you’re never blindsided.

Why This Matters

When you know exactly where your money is going:

✅ You feel in control
✅ You make smarter spending decisions
✅ You can pay yourself with confidence
✅ Your business grows sustainably

Final Thoughts

Making money is only half the battle. Keeping it, managing it, and using it wisely is what builds long-term success. If you’re tired of wondering where your money goes, we can help you track it, control it, and finally feel in charge of your business finances.