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What is hidden cash and how do I find it?

The only thing worse than wasting valuable funds is not knowing its even happening. Interestingly, many businesses are unaware of all the cash that is either being wasted or tied up in other areas of their business. This significantly impacts profit margins, worsens cashflow, and increases inefficiencies. In this blog, we explore the most common forms of hidden cash and how we help you find it.  

Common forms of hidden cash

Optimising the cash flow of your business is vital for long-term growth. Over the years, Alpha Financials resolved numerous cashflow problems, recovering thousands of pounds from a wide variety of businesses.

For example, we helped a £1 million p/a company reduce debtor days by 2 weeks. This released over £20,000 unnecessarily tied up in their business. Similarly, we encouraged these clients to reassess the way they price different services. This increased profits further and minimised hidden costs. Whether it’s an overdraft, pricing issues, or extra tax, hidden cash is often retrieved from all corners of your business. Here’s an overview of some ways that hidden cash could be trapped in your business.  

• Not collecting debtor payments in time
• No formal debtor control process
• Inappropriate stock levels
• Excessive use of overdraft facilities
• Inadequate analysis of costs
• Insufficient focus on the profitability of different products or services
• Missed tax saving opportunities

How to ‘find’ hidden cash

The danger of hidden cash is that it could be trapped anywhere in your business. Usually, this is without your knowledge – like several needles in a haystack. Most of the time, businesses are too involved with their own operations to see what they’re missing out on. Additionally, a busy schedule and a lack of accounting experience often wastes thousands of pounds a year.

While this may seem frustrating, this is always an opportunity, not a burden. Finding hidden cash is always a much-needed bonus, which you can reinvest into your business. As you may not know how to approach the issue, having an experienced management accountant is vital. They help identify areas that improve your cashflow in an efficient and cost-efficient manner.

Alpha Financials 

Every year, we help countless businesses find hidden cash and minimise inefficiencies. Furthermore, a management accountant is a long-term investment into the value of your business and the worth of your assets. Adding a management accountant to your team increases the resources available to your business. Alpha Financials offers access to an experienced financial sounding board, helping you to take that vital next step in your development.

Get in touch with Alpha Financials today to get a head start on finding and retrieving your hidden cash.