Revenue, Profit & Cash Flow - What Every Freelancer Should Know
If you're self-employed in the Netherlands, you've probably heard the terms revenue, profit, and cash flow.
And if you've ever used them interchangeably, you're not alone.
But they actually mean very different things, and understanding each one can help you run your business more confidently. These are three of the most important numbers every freelancer should know. Here's what they mean, why they matter, and how to figure them out.
What is Revenue (Turnover)?
Revenue is the total amount you earn from your services or products before deducting any costs or taxes. It’s the full value of your invoices, and it’s usually the top line on your income statement.
In simple terms:
Revenue = number of hours worked or products sold × your rate or price
Why it matters
Revenue shows how much money is coming into your business. It’s often used to track growth. But high revenue doesn’t always mean your business is doing well, especially if your costs are also high.
Example
You invoice 50 hours at €100/hour.
Your revenue for the month is €5,000.
That doesn’t include software, subscriptions, rent, or anything else you pay for to run your business.
What is Profit?
Profit is the amount left over after you subtract all business expenses from your revenue. These expenses might include tools, subscriptions, travel, insurance, office space, or marketing costs.
Profit = revenue – costs
Why it matters
Profit tells you how much you’re really earning, what you can pay yourself or reinvest. It’s a clearer sign of financial health than revenue alone.
Example
Revenue: €5,000
Costs: €2,000
Profit: €3,000
You could be making €10,000 a month in revenue, but if your costs are €9,000, you're only making €1,000 in profit.
What is Cash Flow?
Cash flow is about timing. It shows how much money is physically moving in and out of your business, and how much cash you actually have available.
Even if you're profitable on paper, you might not have cash in your bank account if you're waiting for clients to pay you.
Cash flow = money in – money out
Why it matters
Cash flow shows if you can pay your bills. A profitable business can still run into trouble if cash flow is tight; for example, if clients pay late or expenses pile up before payments come in.
Example: Putting it Together
Let’s say you have:
Revenue: €8,000
Costs: €3,000
Unpaid invoices: €2,000
Your profit is:
€8,000 – €3,000 = €5,000
Your cash flow is:
(€8,000 – €2,000 unpaid) – €3,000 = €3,000
You’ve earned well, but you only have €3,000 available to spend this month.
Why All Three Matter
Here’s a quick summary:
Revenue shows how much you’re bringing in
Profit shows how much you keep after costs
Cash flow shows how much you can actually spend right now
All three numbers are useful, but cash flow is what keeps your business running day to day.
Need help with your numbers?
If you're not sure how profitable your business is or whether your cash flow is healthy, we can help.
In a one-on-one consultation, we’ll review your numbers together, and I’ll provide you with practical, honest advice tailored to your specific situation.