The call came from a new in-house accountant at one of our long-standing clients.
They sounded panicked.
“Garry, we’ve got a serious problem,” they said. “We don’t have enough cash to make payroll this month — and it’s due in just a few days!”
This client is a little different. Unusually, we don’t manage their full finance function. While we handle their monthly management accounts and have set up their payroll and payment systems, they look after their own cashflow.
So I pulled in our team to investigate.
It didn’t take long to find the issue.
The new accountant had spotted a sizeable sum sitting in the business’s current account. Thinking they were being proactive, they moved it into a ‘notice required deposit account’ to earn some extra interest.
But the money wasn’t spare — it had already been earmarked to pay staff.
Inadvertently, they’d locked away the cash the business needed to meet its most urgent obligation. They’d made a well-intentioned decision — but without full visibility into the company’s cash commitments, it nearly triggered a major problem.
It’s a common misunderstanding when it comes to cashflow.
Having a healthy bank balance today doesn’t necessarily mean the business is financially secure.
What really matters is how your money ‘behaves’ over time — how it flows in and out of the business over the coming weeks and months.
For example:
- You might have £100,000 in the bank today — but if £80,000 is due to suppliers next week, your financial runway is much shorter than it seems.
- Or you might feel strapped for cash right now — but knowing a major client payment is arriving in 10 days could help you avoid unnecessary borrowing or panic decisions.
That’s why strong cashflow management is all about looking ahead. It’s not just knowing your cash position today — it’s having a clear view of what’s coming in, what’s going out and when.
Only then can you make confident, informed decisions about spending, saving or investing.
It’s also why cashflow forecasting is built into our service when we fully manage a client’s financial function. It gives our clients the clarity they need to move forward — without fear of overextending themselves — and helps prevent situations like the one above.
Of course, every business is different. Some prefer to manage their own cashflow, which is absolutely fine. But you need to have systems in place that give you complete visibility over your upcoming obligations and inflows.
If you don’t feel fully in control of your cashflow, or you’d like a clearer view of what’s ahead, we can help. Just email garry@insightassociates.co.uk or call us on 01279 647 447 for a no-obligation chat with me or one of our specialists.
And in case you were wondering — yes, payroll was made on time. After some careful negotiations with the bank, they released the funds early, for a fee.
A close call — and a valuable reminder that good cashflow planning doesn’t just protect your bank balance. It protects your time, your team and your peace of mind.
Warmly,
Garry
