CEO: "I don't understand. How can we have millions coming into this company and still struggle to pay our suppliers?"
Accountant: "Because money coming into the company is not the same as money available to spend."
CEO: "We just received payment from two major clients. What happened to the money?"
Accountant: "We have salaries, outstanding supplier invoices, rent, logistics expenses and tax obligations. And three other clients are yet to pay us."
CEO: "So you're telling me we are making money but don't have money?"
Accountant: "That's exactly what I'm telling you, sir."
This happened on a Tuesday morning in my company around Victoria Island, Lagos.
It was one of those mornings when everybody seemed to be in a hurry. Staff were moving between offices, phones were ringing, and the operations team was already discussing deliveries for the day.
I had just returned from a meeting when our accountant walked into my office with a file.
He looked unusually concerned.
Accountant: "Sir, I need us to discuss our cash position before we approve any new expenses."
CEO: "What is the problem again? We have been busy all month. Business is moving."
Accountant: "Business is moving, sir, but our cash flow is under pressure."
CEO: "Explain it to me."
He opened the file and started showing me the figures.
We had completed several projects, issued invoices and recorded impressive revenue. From the outside, everything looked good.
But behind the scenes, the situation was different.
Some customers had delayed payments for weeks. We had suppliers demanding their money, employees expecting salaries, and operational expenses that could not wait.
Then he pointed to something else.
Accountant: "Sir, we also need to talk about the new office furniture you approved last week."
CEO: "What about it?"
Accountant: "We can afford it eventually, but I don't think this is the right time to spend that money."
CEO: "You want me to postpone everything because of cash flow?"
Accountant: "I'm asking you to separate what the company wants from what the company needs right now."
I leaned back in my chair.
Honestly, I wasn't happy with what I was hearing.
As CEO, I wanted to see progress. I wanted the office to look better, the team to have better equipment, and the business to keep expanding.
But our accountant was looking at something I had not paid enough attention to.
The company was growing, but our financial discipline was not growing at the same pace.
CEO: "So what do you suggest?"
Accountant: "First, we follow up on outstanding invoices. Second, we negotiate better payment terms with suppliers. Third, we review expenses that can wait. And going forward, every department should work with an approved budget."
CEO: "You mean I should start asking permission before spending my own company's money?"
Accountant: "No, sir. I'm saying the company should not spend money without understanding the consequences."
That statement stayed with me.
We eventually reviewed the expenses, contacted customers with outstanding invoices and introduced stricter approval procedures.
Some decisions were uncomfortable, but they were necessary.
A few weeks later, I called the accountant into my office again.
CEO: "I have been looking at the latest cash flow report. Things are improving."
Accountant: "Yes, sir. We are getting better control of our spending."
CEO: "I think I owe you an apology. I used to think accounting was mainly about recording what we had spent."
Accountant: "That's part of it, sir. But my job is also to help make sure we don't spend ourselves into trouble."
We both laughed.