This is the most common question a growing service business asks, and the answer is almost never that something is wrong. Profit and cash measure different things.
Profit counts work you have done, whether or not you have been paid for it. Cash counts money that has actually arrived.
A month with $80,000 invoiced and $30,000 collected is a good profit month and a bad cash month, and both figures are correct.
The four places the money is
Work down these in order — one of them is almost always the answer.
It is with your customers. Money owed to you is profit you have earned and cannot spend. Check days to get paid: if it has drifted upward, the business is financing its customers.
It went into materials for work not yet invoiced. You bought, you built, you have not billed. That is working capital and it grows with the business.
It repaid debt. A loan payment is not an expense — the capital portion reduces what you owe rather than appearing on the profit and loss. Cash leaves and profit does not move.
You took it out. Owner draws are not expenses either. They reduce cash and not profit.
Why growth makes it worse
Growth consumes cash before it produces any. Every new job means materials and labour paid weeks before the invoice, and months before the payment.
The faster you grow, the wider the gap. A business growing 40% a year can be profitable on every single job and run out of money, which is a genuinely counter-intuitive thing to live through and the reason this question gets asked.
What to do about it
Nothing about your pricing. This is a timing problem, not a margin problem, and the fixes are timing fixes: invoice sooner, collect faster, take deposits, use supplier terms.
See extending your runway and the cash conversion cycle.
When it is a real problem
If profit is strong and cash keeps falling over several months while the business is not growing, that is different. Look at what you are actually collecting versus invoicing — see collectible receivables.
Your own numbers
This article explains the general case. For what is actually happening in your business — which customers, which jobs, which period — ask the assistant in the Command Center, which can see your workspace. The wiki cannot: it is public, and it has no access to anyone's data.