Why am I losing cash?

Cash is the life-blood of any organisation, so where should you start to look if your cashflow isn't as good as you want it to be?

Cash and accounting are often two different things. Receiving cash in is not necessarily the same as generating revenue, and having a good level of revenue is not necessarily the same as receiving cash.

In accounting, there are non-cash transactions, and as your organisation gets bigger, the non-cash transactions can be greater and greater.

If you struggle to meet your bills each month, then you need to look at your cashflow: where does it come from? where does it go?

​That will most likely mean drawing up a cashflow forecast. It could mean drawing up a cashflow diagram to give a visual picture of its path.

Some areas, like expenses, can be easily plotted. They are regular and mostly known about. 
Some areas, like income, may not be so easy to plot (especially if you work on projects or have intermittent income).

Timing can be a huge influencer on cashflow! When plotting your income and expenses, look at EXACTLY when you expect the transactions to happen. Whilst you may pay your suppliers regularly, your clients may not pay you when you expect them to. Perhaps build in some buffer time - if a client pays you a month later than you expect, what effect will that have?

For more insights and help with cashflow, contact me today and we'll look at your cashflow together.

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