Packages sell out, cash runs out

You collected RM80,000 this month. So why are you scrambling for cash to pay salaries?

The books look great, but the bank account is tight. You think you're bad with money. You're not.

1. Packages are prepayments: you collected money, but you owe services

When a customer buys a package, the money comes in today, but the services are delivered over the next few months. You collected money, but you owe services.

It looks like revenue, but a large part of it is actually what you owe your customers.

2. The more you sell, the busier your future and the tighter your cash

Over the next three months, customers come back for their treatments. Beds fill up, staff salaries and commission still get paid, products still get used, but these customers don't pay any new money.

For example: you sold RM80,000 in packages this month, to be used over three months. For each of the next three months, roughly RM26,700 worth of services must be delivered, and none of it brings in new money. If you treat the whole RM80,000 as profit this month, the next three months get tighter and tighter.

The more packages you sell, the busier your future and the tighter your cash.

3. Do this today: check your unused prepaid balance

1. Add it up. Total every customer's unused package sessions and prepaid credit. That's the service you owe, your unused prepaid balance.
2. Compare. Put it next to the money in your bank account. If you owe more in services than you have in the bank, be careful.
3. Set some aside. Don't spend all package money as profit. Set part of it aside, in line with how fast customers use their sessions, to cover future staff and costs.

Conclusion: look at sales, and at how much service you owe

Selling lots of packages is good news. But if you only look at money collected, it's easy to think you're richer than you are. What you really need to watch is how much service you still owe customers.

CCS Plus customer profiles record each customer's remaining sessions and prepaid credit, and the P&L lists package prepayments separately, so you can see at a glance how much service you owe. Book a 30-minute Demo and we'll show you using your real data.