The short answer is timing 🕰
For the long answer get yourself a coffee ☕️ and sit down – this is hard to simplify into a short weekly email…
Cash in the bank, for all businesses (especially small), is what keeps you operating – it’s what you use to pay your employees, your suppliers, yourself… but… when it comes to your accounts it is only part of the story.
Typical differences are:
– Client invoices awaiting payment
– Assets like computer equipment
– VAT due
– Payroll/PAYE due
– Unpaid supplier invoices
– Previous year(s) profit/loss
Sometimes it’s hard to fathom when you become a business owner but when you have a limited company and you check the business bank account, not all of that money is yours! 😳
On top of what your online banking is telling you, there will always be money that is owed both from and to the business at any point in time.
We have a simple (free!) cashflow forecasting template you can ask us for, or if you need more support we offer our clients a piece of software called Fluidly that links seamlessly with most cloud accounting software. With a large dollop of AI and a sprinkling of common sense intervention it can provide a fairly accurate view of what might (or might not!) be on the horizon.