What are liquid assets?

Liquid assets are funds or possessions that can be quickly converted into cash without significant loss of value. This includes cash on hand, bank account balances, and available funds from payment platforms like PayPal or Mollie. In other words, liquid assets are what your business can use today to settle its financial obligations.

As a business owner, maintaining control over your finances is essential. Liquid assets offer clear insight into your business’s short-term financial health and form the basis of a healthy cash flow. In this article, we explain what liquid assets are, how they appear on your balance sheet, and how to ensure your business always maintains a strong liquidity position.

Table of contents

1. What is the meaning of liquid assets?
2. Where do liquid assets appear on the balance sheet?
3. Why are liquid assets important for your organisation?
4. Manage your liquid assets with Payt
5. Frequently asked questions about liquid assets

What is the meaning of liquid assets?

The liquid assets definition is straightforward: they are financial resources that are readily available to meet immediate payment obligations. These typically include:

• Cash in hand
• Funds in your business current account
• Available credit on your business credit card
• Balances held in online payment platforms such as PayPal or Mollie

In effect, liquid assets are the financial lubricant of your operations. Without sufficient liquidity, it becomes difficult to pay suppliers on time or act on growth opportunities when they arise.

Where do liquid assets appear on the balance sheet?

On your balance sheet, liquid assets are listed under current assets on the assets side. They’re generally listed last within the current assets section, reflecting their immediacy and availability. Alongside debtors and stock, liquid assets form part of your working capital.

Understanding where liquid assets appear on the balance sheet allows you to assess how much cash is available and how quickly additional funds could be freed up.

Why are liquid assets important for your organisation?

Liquid assets offer a real-time view of your financial stability. Can you pay salaries, suppliers, and taxes on time? Do you have a sufficient buffer to absorb unexpected expenses?

Insufficient liquidity can result in missed payments or lost business opportunities. On the other hand, a surplus of liquid assets gives your organisation flexibility to invest, grow, or adapt to market shifts.

Manage your liquid assets with Payt

Payt helps you manage your liquid assets by automating your accounts receivable process. This ensures faster invoice payments and increased cash flow.

Benefits of Payt:

• Faster payments: Invoices are paid up to 30–50% quicker
• Time saved: Up to 80% less time spent on chasing overdue invoices
• Full control: Set your own tone and timing for payment reminders
• Certified security: Our platform is ISO 27001 certified for data protection

Ready to improve your financial position? Download our brochure or schedule a free demo. Join more than 17,000 users already using Payt for smarter credit management.

Frequently asked questions about liquid assets