You are reviewing monthly results for a mid-sized financial services business that bills clients upfront but collects cash later. Your CFO wants to know why the income statement shows strong revenue while the bank balance barely moved. You only have one month of activity and need to explain the difference between revenue and cash flow in plain terms.
| Metric | Amount |
|---|---|
| Services delivered in the month | $500,000 |
| Cash collected from customers | $320,000 |
| Accounts receivable at month-end | $180,000 |
| Cash paid for operating expenses | $210,000 |
| Beginning cash balance | $1,000,000 |
| Ending cash balance | $1,110,000 |
How would you explain the difference between revenue and cash flow using these numbers, and what does the month-end cash movement tell you about the business's working capital timing?
