Why your business account balance doesn't show what you can actually spend

A balance is a snapshot, not a forecast

A bank account records the past. Every line is a transaction that has already taken place. That information is accurate, and completely useless for deciding on a future expense.

Because between 9 August and the end of the quarter, a good part of that amount already has an owner. It sits in your account, but it is no longer really yours: it is simply waiting for its departure date.

• the VAT collected since the start of the quarter, which was never yours
• the social security contributions for the current quarter
• supplier invoices already received but not yet paid
• the month's subscriptions and recurring costs
• what you need to pay yourself to live on

The trap isn't a lack of money, it's the timing

A self-employed person who runs short has usually not earned too little. They decided at the wrong moment, based on a figure that described a different point in time from the one when the expense would bite.

The mechanism is always the same. Early in the quarter the balance grows: payments come in, the big deadlines are far off. The business looks healthy. That is exactly when the costly decisions get made. Then the end of the quarter arrives, and three payments fall due within a fortnight.

Nothing went wrong. The calendar simply caught up with the decision.

What your accountant can't tell you

Accounting software does its job very well: it records what has been invoiced, classifies, calculates, prepares the returns. It looks backwards, because that is exactly what it is asked to do — accounts must be accurate, not predictive.

But what you are missing when you decide is not the accuracy of the past. It is a projection: how much will I really have in three weeks, once everything already committed has been taken out?

That question has no accounting answer. It only has a budgeting answer, and it rests on information only you know: what you have planned, what you have committed to pay, what you want to set aside.

The method: subtract before you decide

The calculation takes three steps, and once it is set up it can be redone in a few minutes.

A note depending on where you are reading from: this article uses the quarter as its reference point, because that is the most common rhythm for self-employed people in Belgium. In France, VAT can be monthly and contributions follow a different calendar. The reasoning is the same from one country to the next — only the date of the next milestone changes, and you are the one who knows it.

• Start from the actual account balance, today.
• List everything already committed up to your next milestone — often the end of the quarter: tax and social security deadlines, invoices received, recurring costs, your own pay.
• Subtract. What is left is what you really have available. That figure, and that figure alone, is what allows a purchase.

An example, with illustrative figures

Take an account holding €12,000 on 9 August. For the current quarter, VAT collected comes to €3,200. The quarter's social security contributions, €1,900. Two supplier invoices received and unpaid, €1,400. The month's recurring costs — insurance, software, business rent — €700. And your August pay, €2,500.

Total committed: €9,700. Actually available: €2,300, not €12,000.

These amounts mean nothing for your own situation; they illustrate an order of magnitude. What matters is the gap: the balance showed five times what you really had.

What it changes day to day

Once this calculation is in place, decisions stop being bets. You no longer ask yourself whether you “can afford it” — you look at a figure that already accounts for what is about to go out.

The side effect is the most welcome one: quarterly deadlines stop being surprises. They are no longer shocks, just dates that arrive on money already set aside for them.