As a CFO, one of the questions I get asked frequently is “where is my cash going?” 

Cash is the lifeblood of any business.  Without it, the business cannot operate effectively and chaos ensues.  Bottom line: business owners need to know where their cash is going because it could be getting tied up in unproductive places.

Here are just some of the places where your cash hides:

• Accounts Receivable: When you don’t have or enforce a credit policy, cash comes in slowly and gets tied up in accounts receivable 
• Prepaid Expenses: Cash tends to hide here as business owners will pay an expenditure too far in advance just get it out of the way
• Inventory: Slow moving inventory must be sold so the money can be reinvested in the inventory that moves
• Fixed Assets: Sometimes cash is tied up in Equipment, vehicles or machinery and the business owner does not realize the impact or makes the decision to pay cash for a fixed asset when the return on their inventory and services rendered is far greater than the cost of financing 
• Accounts Payable: In a similar fashion to Prepaid Expenses, cash can get tied up here by paying bills too quickly 
• Lower Profit Margins:  Simply put: your selling prices might be too low.  A good way to check is by the number of customer complaints. If at least 25 to 35% of your customers are not complaining about your prices being too high then your prices are too low! Costs of services can also be too high and impact margins. Always negotiate with suppliers or streamline processes
• High Overhead: A high overhead base can always kill cash flow.
• Employee Theft: Unfortunately, 80% of all theft is employee theft. It’s always best to be vigilant

Take a look at this list and take charge of your business!