Recently, we onboarded a hospitality client who was experiencing ongoing cash flow stress. Their books were messy, and their Balance Sheet simply didn’t make sense. So we did what we do best – dug deep.
What we found was startling: a $370,000 cash shortfall. This was money that should have been received between February and now – but had never reached their bank account. Yet, the client had no idea.
The Cause: One Small Mistake, Big Consequences
After some careful detective work, we traced the issue back to February, when the client updated their bank details with a large national delivery platform. Unfortunately, when copying and pasting the new BSB number, the leading zero was dropped. The platform’s system flagged the account as fraudulent and silently paused all payouts – without notifying the client.
Since then:
- Revenue continued to be recorded monthly in lump-sum journals
- No source documentation was attached to the entries
- Clearing accounts were used, but not reconciled
- No one questioned the missing $30K/week in expected revenue
- The Balance Sheet showed a ~$400K discrepancy, but it went unchecked
The Impact
The result was a significant cash flow crisis that completely blindsided the business owner. They had been relying on financial reports and projected income, unaware that a major revenue stream had stopped altogether. No one had asked the right questions. No one had gone looking for the money.
Until we did.
The Resolution
Once we uncovered the issue, the client contacted the delivery platform and resolved the account flag. $370,000 in withheld payments is now being processed and will land in their bank account within days. It was a huge relief – but also a clear reminder of the risks that come with poor bookkeeping practices.
The Takeaways
This situation could have been avoided with proper systems, processes, and professional oversight. Here are the key lessons:
- Clearing accounts must be regularly reconciled. They should never be left to accumulate without explanation.
- Journals need supporting documentation. Every transaction must be traceable.
- The Balance Sheet tells a story. If it doesn’t look right, it probably isn’t.
- Numbers don’t lie – but they do need to be questioned. When something feels off, investigate.
Why Our Work Matters
This is more than a cautionary tale – it’s a reminder of the real value of good bookkeeping. It’s not just about entering data or ticking boxes. It’s about protecting businesses, uncovering issues before they escalate, and giving business owners the clarity they need to make confident decisions.
At Blackwood Bookkeeping, we’re passionate about eradicating financial stress, not just balancing the books. And stories like this show exactly why care, curiosity, and attention to detail are so critical!
If you’re unsure whether your reports are telling the full story, or you’d simply like a second set of eyes on your numbers – book a free discovery call with us today. Let’s uncover what’s really going on behind the Balance Sheet.
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