Sales are growing, the team is busy, yet the bank balance never seems to catch up. Most businesses don't lose money in one big mistake. They leak it, in small and regular amounts that nobody is watching. These are the five leaks we find most often in a Leak Check, and what fixes each one.
1. Cash sales with no receipts
When cash or bank-transfer sales aren't recorded properly, you end up with income you can't prove and profit you can't see. Lenders won't count it, buyers won't value it, and tax authorities may estimate it for you.
Signs: deposits in the bank don't match your sales reports, or stock goes missing with no sale against it.
Fix: issue a receipt for every sale through your till or invoicing app, record cash daily, and reconcile cash and bank every month.
2. Late filing penalties
A return filed a week late can cost more than the work of filing it on time. Penalty regimes are getting stricter: the UK's new points system under Making Tax Digital, for example, leads to a fixed £200 penalty once you reach the points threshold, and the UAE charges monthly penalties for late corporate tax returns.
Fix: keep one compliance calendar with every deadline, close your books monthly so returns become a formality, and make one person accountable for each date.
3. VAT or GST paid but never claimed back
If you're registered for VAT or GST, the tax you pay on business costs can usually be reclaimed. It only works if you hold valid tax invoices and record purchases with the right tax codes. Missing invoices and wrong codes mean you leave that money with the tax authority.
Fix: collect a proper tax invoice for every purchase, code purchases correctly in your software, and review past periods. Many tax authorities let you correct earlier returns within time limits, so check the rules where you're registered.
4. Family and personal costs on the business
Personal spending through the business account blurs your real profit. Prices get set on the wrong numbers, and personal costs claimed as business expenses can create tax problems later.
Fix: use separate cards and accounts, agree a simple expense policy, record owners' drawings properly, and review spending every month.
5. “Payment next week”
Customers who pay late are using your cash as an interest-free loan. The faster you grow, the bigger that loan becomes, which is why growing businesses so often run short of cash.
Fix: put clear payment terms on every invoice, look at a list of who owes you what every week, automate reminders, and take deposits on large jobs.
How to find your own leaks
- Reconcile bank, card and cash accounts every month.
- Track gross margin by product, service or customer, not just in total.
- Compare the profit in your accounts with the change in your bank balance. A big gap is a clue.
- List every filing deadline for the next twelve months in one place.
If you'd rather have someone look for you, book a free 20-minute Leak Check. We'll tell you where the money is most likely slipping away, in plain words.
This article is general information, not tax or legal advice. Rules change, so check the current position or speak to us before acting.