Ever scratch your head wondering how your business is making money, but your bank account doesn’t show it? You’re not alone! Often the answer lies hidden in your balance sheet. So, let’s dive into six spots where your cash might be playing hide and seek:

  1. Inventory Increases: Have you noticed a significant rise in your stock levels? If so, this could be tying up a substantial amount of cash that isn’t immediately available in your bank account.
  2. Outstanding Receivables: If your customers are taking longer to pay than before, this means your cash is still with them. Monitoring and managing this area can free up some much-needed liquidity.
  3. Accounts Payable: While managing your payables efficiently is good, overly quick payments can also deplete your cash reserves faster than necessary. It’s all about finding the right balance.
  4. Tax Payments: Have you recently paid last year’s taxes or made payments for this year’s tax bill ahead of time? While this is prudent, it also means cash has left your account, impacting your available funds.
  5. Director Withdrawals: Any personal withdrawals or loans to company directors or related parties can significantly affect the company’s cash reserves. These transactions don’t appear on the profit and loss statement but are crucial for understanding your cash flow.
  6. Loan Repayments: Finally, while loan repayments help reduce debt, they do not show up as expenses but directly impact your cash position.

Understanding these elements can provide a clearer picture of your financial health and help you take steps to improve your cash flow.

Partnering with Quantum Advisory allows you to focus on what you do best – running your business – while leaving the financial aspects in capable hands. Contact us today to experience the benefits of working with Quantum Advisory.