Examine Your Balance Sheet to Unlock Hidden Cash

Need cash in a hurry? Here are several ways that business owners can improve cash flow by turning to their financial statements.


When trying to round up extra cash, many businesses look at their accounts receivables first. You could use the carrot-and-stick approach, for instance, offering early bird discounts to new or trustworthy customers while tightening credit policies or employing in-house collections staff where necessary.

Be wary of using too much “stick,” however, thus leading to a loss of customers and making the situation worse. Rather than leaning too heavily on drummed up collections, consider refining your collection process through measures such as electronic invoicing, requesting upfront payments from customers with questionable credit and using a bank lockbox to speed up cash deposits.


Inventory is another place to locate additional cash. By keeping this account to a minimum you can more easily reduce storage, theft and security costs. This method also provides a clear view of what’s in stock.

Newly upgraded inventory tracking and ordering systems assist with forecasting demand while keeping overstocking to a minimum. In appropriate cases, you can even share data with customers and suppliers to make supply and demand estimates more accurate. Consider the benefits of upgrading your inventory tracking and ordering systems if you haven’t done so recently.


Typically, the technique with payables is the opposite of getting cash from receivables: you want to delay payment process in order to keep yourself in the best possible cash position. The underlying downside to this strategy is potentially earning a reputation as a slow payer, resulting in a compromised credit standing and unfavorable payment terms. If any of this hits close to home, review your relationship with vendors and see whether you need to rebuild trust with them. The goal is to take advantage of deferred payments as a form of interest-free financing while still making those payments within an acceptable period.

Is your balance sheet lean?

You need a steady flow of cash to keep operations running efficiently. By trimming the “fat” from operative capital accounts, you can generate and deploy liquid cash, thus maintaining your company’s competitive edge and keeping it in good standing with stakeholders. For more ideas on how to efficiently manage items on your balance sheet, please call us at 949-860-9902 or click here to contact us.