“Where is my cash hiding?” Is one of the questions I get asked most frequently as a CFO.

And with good reason: cash operates as the lifeblood of a business; not knowing where it is or why you don't have it poses a serious problem.

To bottom line it for you: business owners need to know where their cash is if they want their business to run.

So, how could a business owner not know where their cash is?

Easily.

In the day to day of running a business, cash gets "stuck" in so many unproductive areas.

The following are just a few examples of where your cash could be hiding:

• When you don’t have or enforce a credit policy, cash comes in slowly and gets tied up in Accounts Receivable.

• Business owners tend to pay expenditures too far in advance to get them out of the way, and the cash tends to hide in Prepaid Expenses.

• You must sell slow moving Inventory to invest the money in the inventory that moves.

• Sometimes a business owner doesn't realize the impact when cash gets tied up in equipment, vehicles, or machinery, or makes the decision to pay in cash for Fixed Assets when the return on their inventory and services rendered is far greater than the cost of financing.

• If you're the one paying bills too quickly, much like it can get stuck in Prepaid Expenses, cash can also get stuck in Accounts Payable.

• Costs of service may be too high, so negotiate with your suppliers and streamline the process. On the other hand, if 25-35% of your customers aren't complaining about your high prices, your prices are too low!  Avoid high costs of service and low prices to avoid Low Profit Margins.

• What can always kill cash flow? High Overhead.

• Stay vigilant, unfortunately, 80% of all theft is Employee Theft.

Think about these possibilities the next time you find yourself asking "Where is my cash hiding?", it could be right under your nose!