If You’re in Business, Why Is Cash Always Low?
Many business owners work hard every day to run their businesses. Their shops are operating, products are being sold, and there are customers—everything seems fine. Yet, at the end of the month, when they calculate their finances, they find there's no cash in hand! Don’t be surprised—this isn’t just your problem. It’s a common concern shared by most small and medium-sized business owners: Why is there no cash in hand?
Why is this happening? You're earning—so where is the profit going? There are several important reasons behind this, and the biggest one is poor cash flow management. In other words, if you fail to maintain a balance between income and expenses, and can't manage the flow of cash properly, you'll constantly struggle—despite being a business owner.
In this blog, we will analyze why, despite being a business owner, you often have no cash in hand—and how you can smartly manage your cash flow to overcome this situation.
This blog contains-
Why Is It Important for Business Owners to Have Cash in Hand?
A business owner's success largely depends on having sufficient cash in hand. That’s why ensuring a steady flow of cash is essential. Now the question is—why? Let’s take a look-
- Freedom to Make Quick Decisions: If a sudden opportunity for extra income arises in business, having cash in hand is essential to seize it.
- Managing urgent expenses: If the price of goods increases or urgent maintenance is needed, not having cash in hand can create serious problems.
- Transparency in Paying Employee Salaries and Bills: If salaries aren’t paid on time, the organization’s credibility is harmed. And then there are all the various bills to deal with as well.
- Overcoming Capital Shortages: A business can run without enough capital, but not without enough cash. Many business owners don’t want to accept this fact.
Not having cash in hand means slowing down your business operations. It's not enough to just see profits on paper—the real challenge is ensuring that those profits actually reach your hands.
Why Don’t You Have Cash in Hand Even Though You’re a Business Owner?
Your business is running, but at the end of the week or month, you're frustrated to see that there's no money in hand! Why does this happen? Why don’t you have cash in hand –
1. Excessive Credit or Selling on Account
You’re giving products to customers on credit too easily, but the payments are getting delayed. As a result, your cash inflow is blocked—while your expenses continue as usual, without any pause.
2. Not keeping track of expenses
Many business owners don’t record small expenses like tea bills, vehicle rent, or minor maintenance. By the end of the month, these small costs add up to a significant amount.
3. Unnecessary expenses
Often, personal expenses are made in the name of the business, such as family shopping, traveling, or giving gifts. These are not actually business expenses, yet they are paid from business funds. As a result, there will be no cash left on hand!
4. Focus more on sales than on profit
You’re happy thinking, “A lot of sales happened today.” But did you actually make a profit? Or how much profit was made? Many people mistakenly consider sales as income, and as a result, they fail to understand the real profit.
5. Lack of cash flow planning
For a successful business, it is essential to plan cash flow on a weekly and monthly basis. You never know when expenses will arise or when money will come in, so suddenly you may find yourself running out of cash.
6. Excessive investment in stock or inventory
You are purchasing goods and storing them in the warehouse, but they are not selling. In other words, your money is tied up in inventory. As a result, you don’t have enough cash on hand to cover daily expenses. This is a common issue among new small and medium-sized businesses.
7. Running Business Without Proper Accounting
If your business accounts are not properly maintained, it becomes difficult to know when income was received and when expenses were made. This irregularity gradually becomes the main reason for not having cash on hand.
How to manage cash flow successfully?
If you want to have cash in hand even after running your business operations, you need to manage cash flow in an organized way. Here are some effective strategies:
1. Use HishabPati software for accounting
By using HishabPati or any other accounting app, you can keep track of daily income, expenses, transactions, and purchases/sales. This also makes it easier to analyze everything at the end of the month.
2. Create a plan to manage cash flow
At the beginning of each month, create a cash-in and cash-out plan. Write down in advance what money will come in and what will go out, and when. This reduces the chances of suddenly running out of cash.
3. Control credit or on-account transactions
Set a specific time frame for collecting payments from customers. Similarly, fix a payment schedule with your suppliers as well. Establish a ‘payment cycle’ for both you and your customers.
4. Regularly analyze profit and loss
Not just sales—prepare a monthly report to know how much actual profit you’re making. This will help you easily identify unnecessary expenses.
5. Keep personal expenses separate
Stop using business funds for personal expenses. If needed, pay yourself a fixed salary, and use the business money only for business purposes.
6. Keep an adequate emergency fund
Keep a fund equal to 1-2 months’ expenses so you won’t be left empty-handed if sudden costs arise. This will be very helpful.
7. Control your inventory
Find ways to sell products that have been sitting in stock for a long time. Avoid keeping excessive stock, as it ties up your money.
Why successful business owners always have cash on hand?
Successful business owners always know the status of their cash flow. They don’t spend recklessly, regularly analyze cash flow, and make business decisions based on their income. If you want your business to grow, first ensure that you have cash in hand at the end of the day. With a few simple strategies, you can keep enough cash by the end of the month. Now is the time to run your business in a planned way, so you earn, make a profit, and always have cash available.
Business is not just about earning, but about bringing that income into your hands through proper accounting and cash flow management. If your problem is — why don’t you have cash on hand? — then today review your business expenses, income, and payment cycles. If needed, use an accounting app and start keeping daily records. Smart business owners keep cash on hand and plan accordingly, and you can too!
Demo - View this & start your journey with HishabPati in three simple steps!
- Step 1: Sign up on HishabPati
First, go to the HishabPati website and create an account for your business. Or, to make managing your business easier, download and install the ‘HishabPati’ app for free today.
Then complete the registration. The registration process in HishabPati is very easy and completely free!
- Step 2: Set up your company
After signing up, first set up your business profile by providing the necessary information as the owner. Then, set up essential business aspects such as inventory, units, purchases and sales, outstanding balances, invoices, and transactions. After that, start updating daily transactions.
- Step 3: Enjoy the various features of HishabPati
Once you start managing your business accounts with HishabPati, make sure to utilize the necessary and unique features, such as invoicing, barcode scanning, units, and expense management. To understand how to use HishabPati and its features in detail, watch demo videos in Bengali on YouTube.
Digital ledger for income and expenses – HishabPati demo.
HishabPati is a simple and affordable accounting app. Its subscription fees are divided into different durations and offered in budget-friendly packages. Check Pricing and Features today in details & choose your desired package. Good luck with your business!
