Where Is My Cash Going? How to Spot and Fix the Leaks

Profits on paper do not always mean money in the bank. Here is how to trace the hidden leaks that quietly drain your business.

You’re Selling Well – So Why Is There No Money Left?

Picture this. You’ve just wrapped up a strong quarter. Sales are up, your team is busy, and on paper, your profits look healthy. But when you check your bank balance… it tells a different story.

It feels like pouring water into a bucket riddled with holes. You are not overspending wildly, and you are certainly not failing, so where is the cash going?

You are not alone. Many ambitious business owners find themselves stuck in this exact scenario. It is frustrating, disheartening, and above all, it feels confusing.

Let us unpack this.

The Invisible Costs That Drain Your Bank Account

The truth is, most cash flow leaks are not obvious. They creep in silently, often disguised as progress, hiring staff, buying new stock, offering extended payment terms to clients. All signs of a growing business, yes but also the beginnings of cash flow strain if not carefully managed.

Here are just a few common culprits:

•  Late customer payments create a cash gap between making sales and actually receiving income, so it's crucial to monitor any debtors that are over 30 days old. 
•  Excess stock ties up valuable cash in inventory that isn't moving, which becomes evident when warehouses or storage areas fill up with unsold goods. 
•  Unplanned tax bills, including VAT, PAYE, or Corporation Tax surprises, can catch businesses off guard, particularly when they fail to forecast for seasonal fluctuations.
•  Staff inefficiencies, whether from having more employees than necessary or poor productivity levels, manifest through excessive overtime costs, duplication of roles, and consistently low output. 
•  A poor pricing strategy that involves selling too cheaply or offering unprofitable discounts can result in healthy turnover figures that mask weak profit margins, ultimately undermining the business's financial health. 

You might think of these as the “slow leaks”, not dramatic, but damaging over time. Especially in a growing business where the pressure is on to keep moving forward.

How to Diagnose Cash Flow Leaks

The good news? Every leak can be found and fixed with the right financial visibility and support.

At Wright Vigar, we often start with a Cash Flow Review that pinpoints where your money is really going. But if you want to start spotting leaks today, here is where to look:

1. Run a Cash Flow Forecast, Not Just a Profit Report

A profit and loss report tells you how well you are selling. A cash flow forecast tells you when the money actually hits your bank. The two are not the same and relying solely on P&L can mask short-term cash problems.

2. Review Your Debtors

How many clients are paying late and by how long? Set clear credit terms, chase invoices promptly, and consider incentives for early payment. A slow-paying customer can be worse for cash flow than a non-paying one.

3. Track Your Tax Timeline

HMRC do not offer sympathy for late VAT, PAYE or Corporation Tax payments and those penalties sting. If your accountant is not forecasting your tax liabilities in advance, ask them to.

4. Spot ‘Busy Fool Syndrome’

Are you generating lots of sales… but with poor margins? Review your pricing, discounting, and service mix. Sometimes, doing less, but more profitably is the answer.

5. Reassess Overheads

Rent, subscriptions, insurance, software all add up. Schedule a quarterly review to identify any “set and forget” costs that no longer serve you.

Practical Fixes You Can Start Today

No one wants to feel out of control financially. Here are a few steps you can take this week:

Create a 12-week rolling cash forecast

Include expected income, outgoings, VAT, payroll, and upcoming tax liabilities. This gives you visibility and control.

Review payment terms on both sides

Negotiate longer terms with suppliers and shorter terms with clients. Aim to close the cash gap.

Set a monthly “finance hour”

Block time in your calendar to review your figures with your accountant if needed. Proactive beats reactive.

Use automation to stay on track

Tools like Dext (for receipt capture) and Chaser (for credit control) can save hours and boost visibility.

Book a Free Cash Flow Review

Let our team take a deeper look at your cash position to highlight quick wins and long-term improvements.

What Better Cash Flow Achieves

When your cash flow is in good health, everything changes.

• You can invest in growth confidently, knowing the money is really there
• You sleep easier, knowing HMRC deadlines are covered
• Your team feels stable and secure because payroll is never in doubt
• You can say “yes” to opportunities, instead of “maybe next quarter”

This is not just about numbers. It is about running your business on your terms with clarity, control, and confidence.

Let’s Talk About Your Business

We believe cash flow should empower you, not hold you back.

Whether you are facing short-term cash strain, planning for a big expansion, or simply want to understand your numbers better — we are here to help.

Book a Cash Flow Review with Wright Vigar today. Let us help you spot the leaks, fix the gaps, and build a more financially resilient business.