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The third cause of poor cashflow - Your stock turn

Anna Stubbs • April 19, 2024

Carrying stock for too long means full shelves but an empty bank account. Similarly, if you’re a service provider and are taking a long time to bill for your services, then you’re carrying too much stock in the form of work in progress. Consider that work in progress a form of virtual stock.

You can calculate your ‘stock turn’ by taking your cost of sales from your annual financial statements and dividing it by your average inventory (or work in process). Most clients need some help from us to work this out, so don’t worry if you don’t understand straight away; we’ll show you. Expected stock turn rates vary from industry to industry, so it’s important you don’t compare your stock turn to other types of businesses.

The key is to convert stock to cash faster. Ask yourself these questions, just for starters:

  1. Do you have a stocking strategy? Do you determine safety stock, desired stock levels, and re-order points for each stock category?
  2. What software do you use to measure how much stock you have on hand at any given point in time?
  3. What clear policies do you have to ensure you have no slow moving stock items?
  4. How much is stock shrinkage (theft, damage) costing your business?
  5. Do you have a formal stock ordering system so that stock levels don’t blow out?


These are just some of the ways to improve your stock turn. If you think your stock levels might be stifling cashflow in your business, make a time to see us.


At our Cashflow & Profit Improvement Meeting, we’ll use our calculator to show you how much cash you can unlock in your business by reducing stock turn with a simple action plan.

Making Tax Digital to be extended to more sole traders and landlords

By Anna Stubbs • April 9, 2025
Hiding in the HM Revenue & Customs (HMRC) announcements published on 26 March was a technical note entitled ‘Modernising the tax system through Making Tax Digital‘. This note announces that the income threshold for Making Tax Digital for Income Tax & Self Assessment (or MTD for ITSA) is to drop to £20,000 per annum for sole traders and landlords. If you fall into this category, this means moving your tax completely over to digital by April 2026. But don’t worry, let’s see what MTD for ITSA is all about.

Reducing the uncertainty: financial forecasting and planning

By Anna Stubbs • April 9, 2025
Uncertainty can be a major threat to your strategic financial planning. Being unsure of what lies around the corner makes it difficult to make those important financial decisions around operational budgets, investment and growth funding. But by using forecasting and scenario-planning, you make it easier to manage your finances and reduce some of the financial uncertainty.

What's new in Xero (Spring 2025)

By Anna Stubbs • April 9, 2025
Some great new enhancements have come to Xero in the first few months of the year, here's some important features that have been released: Enhancements to the new invoicing Keyboard shortcuts. Drag and drop attachments. Date Picker quick select. Exchange rate adjustments in the invoice. Tracking categories for invoices. Automated bill entry The ability to upload bills directly to Xero, create one or many bills by dragging and dropping multiple files. Xero creates draft bills with the key details, and the original document is attached. Other important features (region dependent) Bank feed updates (Australia adds Suncorp Bank, United States gains PNC Commercial). Simplified whole operations with improved sales orders (United States). Easier 1099 reporting and filing (United States). Streamlined tax workflow and compliance (United Kingdom). Easier reporting (United States Schedule C compliance report, New Zealand not-for-profit tier 3 & 4 PBE reports). For the full breakdown read Xero's update .
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