How to Recognise the Signs of Poor Cash Flow in Your Business


You have probably heard that cash flow is the lifeblood of any company. No matter how great the product or service that you sell is, how friendly and helpful your customer service is, or how many orders your business is getting, if you do not have enough money to ensure that your business survives between delivering a product or service and getting paid for it, your company is experiencing cash flow problems. And if they are left unchecked, it can quickly lead to disaster for a business that was otherwise healthy or had a lot of potential. Here are some signs that could indicate your business is having cash flow trouble. 

Debtors Aren’t Paying On Time:

Nobody likes to ask for money, whether you’re asking a family member to repay that $50 you let them borrow for an emergency expense a month ago or a customer who hasn’t paid the invoice you sent them. But clients and customers not paying their invoices can lead to serious consequences for your company, such as not being able to pay your employees. There are a few things that you can do to encourage your clients to pay on time such as invoicing immediately, listing the payment terms clearly on your invoices, and having an organized credit control system in place including reminders to pay. 

No Finance Access:

If you are looking for finance because you are experiencing a tricky cash flow situation, your business could already be in trouble. It is important to have a short-term financing facility in place before you absolutely need it. Whether you get a business overdraft facility on your account, a business credit card, or invoice financing services, having funding available that you can access before you really need it can help you avoid future cash flow issues. 

Tax Issues:

If your business cannot afford to pay the taxes that it owes, you could be in big trouble. Cash flow problems can often leave a company without enough money left to pay the tax bill, which is why it’s important to get professional help from the get-go from an experienced tax accountant offering CPA Services, such as Brown Smith Wallace. They can work with you to determine how much tax you are likely to owe at any given tax year and ensure that you are prepared for the bills with adequate financial records. 

Offering Too Many Discounts:

Everybody loves a discount and from time to time it can be a good way to generate more interest in your brand and get new customers. However, if you are finding yourself discounting products all the time just to improve sales and encourage customers to purchase something, your business could be in cash flow trouble. While offering discounts can boost sales, it’s important to make sure that you are not doing it so often that customers come to expect the discounted price and your profit margins suffer as a result. 

Cash flow issues can quickly kill an otherwise great business. Keeping your eye out for some early signs of cash flow trouble is often important to make sure that your business survives. 


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