Sales are good — so where is the cash going?

Sales are not cash

A sale is recorded when it is made; cash arrives when it is collected. If you sell on credit terms, you are financing your customer for the payment period. Review your receivables: how old are they, which customers pay slowest, and when do you realistically expect each amount?

Inventory absorbs cash quietly

Every riyal sitting in inventory is out of your account until it is sold and collected. Rising inventory with flat sales is a direct sign of cash pressure. Track how long stock sits before selling, and separate fast-moving items from dead stock.

Timing is the real problem

Put it on one page: when you pay suppliers, when payroll and rent and fixed obligations fall due, and when you expect to collect. Often the issue is not the size of the numbers but the order of the dates within the month.

A simple three-month forecast

You do not need a complex accounting system. A weekly table is enough: opening balance, expected collections, expected payments, closing balance. The week that turns negative is when your gap hits; the largest negative figure is roughly how big it is.

• Opening balance for each week
• Expected customer collections
• Fixed and variable payments
• Closing balance, flagged when negative

Before you think about financing

Knowing the size, timing and duration of the gap makes any conversation with a finance provider clearer, and helps you see whether financing is the answer at all — or whether collection terms or inventory need adjusting first. Monshaat publishes a cash flow management tool for businesses that can serve as a general reference.