Recently I caught up with a friend of mine and as we were talking I noticed she was not at her exuberant best. This was very unusual as I have not known anyone that could be as cheerful as her on a constant level.

So, I asked the obvious, ”what is wrong”?

Her response shocked me, “I am running out of cash”.

This came as a complete surprise to me, as I’d guessed she had a great business where she was always busy running from appointment to appointment.

 After talking candidly for a while about her business and intimating to me how busy she is, I asked to look at her financial reports. What I uncovered didn’t make sense. After further enquiry the underlying problem came out. She was so busy that she never had time to bill her customers for the work that she and her staff were doing. The cardinal sin of being in a service-based industry.

There are times when, from necessity, I’m not at my diplomatic best and this was one of them. But I felt compelled to be blunt with a friend on the basis that sometimes you must be cruel to be kind. I simply asked, “have you $50,000 to lend me at no interest like you do to your customers”?

The look of confusion was, in part amusing and part worrying. But the message got through very quickly. We  agreed on a plan to review her financial reports at least monthly. Reviews over the first few months showed that her available cash was still in decline due to the timing of her invoicing.

She’d have to change a long-standing habit. I asked when her least productive time was. And, no surprise, it was on a Friday afternoon. We then diarised that time to be what I called her ‘champagne afternoon’. Every Friday afternoon she could enjoy a glass or two of champagne after her timesheets were completed and any bills that she could produce for that week were processed.

Nothing gives me more pleasure than when I receive her monthly phone call telling me she has printed out her financial reports and is seeing cash in the bank. Even after minimum tuition she better understands the story her Balance Sheet reveals. This is more than just numbers.

Do you or someone you know need help with their cash flow or understanding what your financial reports are telling you? Start your journey by emailing me – Mark Calleja – at or call me on 02 9923 2959 and see the true value of an accountant.