You finally got around to sending the invoice (yay you!). The client paid. Money hit the business account. And then somehow, through a combination of expenses, taxes, unexpected costs, and maybe a few spending decisions you made when the balance looked healthy, there's not actually enough left to pay yourself what you need this month. Again! You’re left wondering where TF it all actually went when the invoice payment should have covered you for a lot longer.
If this has happened to you more than once, you're not doing something wrong. You're running into one of the most common and least talked-about financial realities of running a business: revenue is not the same thing as profit, and profit is not the same thing as money you can actually pay yourself. These three numbers can look wildly different from each other. And if you're making decisions based on one while thinking you're looking at another, the math is never going to add up.
This is genuinely confusing for anyone running a business. It's harder with ADHD.
The Three Numbers You're Probably Confusing
Revenue: The Number That Feels Exciting
Revenue is the total amount invoiced or received. The $6,000 you billed for this month. This is the number that gets referenced when people ask how the business is doing, and it's the number that makes you feel like things are going well. It’s also usually the number that you see people talking about and sharing pics on Instagram of them holding up 100K balloons showing they’ve hit a big goal. But revenue before expenses and taxes is almost meaningless as a guide to what you can pay yourself. It's the starting point, not the answer.
Profit: What's Actually Left After Expenses
Profit is what remains after you subtract business expenses from revenue. Software subscriptions. Contractor fees. Insurance. Marketing. If your revenue was $6,000 and your business expenses were $2,000, your profit was $4,000. That's meaningfully different from $6,000, and it's unfortunately still not the number that tells you how much you can pay yourself.
Cash Flow: The Timing Problem Nobody Warns You About
Cash flow is about timing. It’s very much influenced by the two numbers above, but you can be profitable on paper and still have no money in the bank. And this comes down to timing, because there is often a delay before revenue hits your bank account, which your expenses don’t give a $hit about! Invoice sent, payment not received. Retainer billed at the end of the month, expenses due at the beginning. Profitable on an annual basis, but right now the account is empty because three clients are 30 days overdue.
Cash flow is what catches most entrepreneurs off guard, and for ADHD brains specifically, the pattern of seeing money arrive, feeling a brief sense of abundance, and spending freely before the next expenses come out? That's the cash flow trap, and it's so common, even I get caught up in it sometimes as a financial coach who ‘should’ know better.
Why ADHD Makes This Harder
Present-Tense Money Feels Real. Future Expenses Don't.
When money hits your business account, it is real, present, and accessible. In fact, an invoice we’ve just sent can often feel like it’s real money, even before it hits our accounts. What isn’t real because it’s not happening right now? The payroll tax due in six weeks, the software renewal next month, the contractor invoice you haven’t received yet. They are real too, but they don't feel real in the same way because how we think about and perceive time is so different from neurotypical folks.
ADHD brains are wired to respond to what's immediately in front of them, which means the money in the account today tends to feel like money available to use today. This isn't a discipline failure. It's how ADHD affects financial decision-making, and it's exactly why "just be more careful" is such useless advice.
Decision Fatigue and the Complexity Problem
Keeping track of revenue, profit, and cash flow simultaneously while also running a business, doing client work, managing relationships, and handling everything else is a significant cognitive load. For ADHD brains that already struggle with holding multiple things in working memory, it often becomes too much to maintain. Which is why so many entrepreneurs end up defaulting to "I'll figure it out at tax time."
A Simpler Way to Think About It
You don't need a full accounting setup to get this under control. You need a few accounts with specific jobs and a simple rule for where the money goes when revenue arrives.
How to Get Started:
If you haven’t separated your business and personal $, start there first and then save this link to come back to later. For help on that, check out this article.
If you’ve already got separate business account(s), you’re ready for the next steps. To do that, you need a few more accounts. I recommend starting with a total of 4 accounts. Here is a list of the different accounts and what their jobs are.
Income/Revenue: All of your income goes into this account. Then it is transferred to your other accounts.
Business Expenses: This is (shocker) where you pay all your business expenses from. Often it makes the most sense for your current business account to become your expense account because there are fewer things to move.
Tax Savings: Being an entrepreneur can be the best path for folks with ADHD, but taxes are often a big stressor and can push us back into a ‘regular job,’ which can be soul-crushing. Saving a set % of your income for taxes eliminates so many things that are often barriers (like knowing your profit, which means doing your bookkeeping). This is of course different for everyone, and I recommend you get personalized guidance here, but if you need a place to start, put 20-30% of your income into this account to get you ready for your taxes.
Your Salary Account: Yes, an account specifically for you to pay yourself from! Who woulda thought? This can help you see how much you can pay yourself, but ideally, also help you build a buffer for slower months or seasons.
You’ve Got The Accounts, Now What?
Next up is to decide when/how often you’ll move money from your income account to your other accounts. This will vary depending on your business structure, how often you get paid, if you have a few larger payments or multiple smaller payments, and if you have any wiggle room or not.
When you start this process, you likely won’t have a lot of wiggle room, which means you have to do your transfers more often. That is perfectly fine, because we have to do what we have to do right now. If you have a few larger payments each month, doing your transfers when each payment comes in could be your process. If you get multiple smaller payments throughout the month, start with a goal of weekly, and then see if that works, or if you want to move to bi-weekly transfers.
Feeling Overwhelmed With Deciding on Your Percentage?
Is there one secret % set up that will work for everyone? Hell no! But, if you don’t know where to start, it’s better to start somewhere with numbers that aren’t perfect than to get stuck in analysis paralysis.
For solopreneur service-based businesses, a good starting point % wise is:
Business Expenses: 20%
Taxes: 30%
Salary: 50%
For product-based businesses, the expense typically % needs to be considerably higher, depending on your markups. But because your expenses are higher, you can often bring the tax % down. Refining the percentages and planning for managing your business and personal $ is something I do with my one-on-one clients. If you’re interested in the support of a financial coach who gets the ADHD side of things, I’d love to connect with you.
Remember this is not advice tailored to you because I don’t know your numbers (and I’m not an accountant). But, again, starting is what’s important, and then you can adjust as you get more information.
Paying Yourself
Your personal pay should be a predetermined amount that transfers to your personal account on a consistent schedule. The goal is to transfer the same amount every pay period regardless of what the business brought in that month. When the business has a great month, the extra stays in the business buffer. When it has a slow month, the buffer covers the gap.
But, it can take some time to get there, so be patient with yourself. Having a clear picture of your personal finances can help you see what you need to cover expenses for the next week when you’re getting started with this. If you don’t know how much you need to pay yourself, my free ADHD Money Starter Kit can help you figure that out!
Where to Start Today
Figure out what accounts you need to open and where you want to open them. A few things to consider:
Are there monthly fees?
How will you transfer $ from your income account to your other account?
How will you transfer $ from your salary account to your personal account?
How much friction do you want to access funds from your tax savings? Often not having a debit card for this account, and having a delay to move the funds to an account you can spend from can be helpful.
About the Author
Sherry is an ADHD financial coach who helps entrepreneurs understand and manage their business money without the overwhelm. She runs her own business, has ADHD, and knows firsthand that the confusion between revenue and what you can actually spend is real and fixable. See what working together could look like.
