considering these points will help you in identifying and avoiding cash flow problems.
1. Disorganised bookkeeping
best way to avoid this is by being meticulous about bookkeeping and by
monitoring your accounts on a regular basis. If everything is tidy and
organised, this will help you to get a clear picture of your firm’s financial
2. Late payment
Late payment can be a source of continual
annoyance for small companies. Not getting paid on time can lead to cash flow
issues, which can prevent growth – or even risk putting you out of business.
As a small business
owner, you need to prioritise prompt invoicing and make it as convenient as
possible for customers to pay you.
3. A dip in business.
If sales take a
plunge, this can mean a sudden drop in income, which can wreak havoc with cash
flow. To avoid getting stung, you need to keep a close eye on sales and monthly
income. If you see an unusual pattern, you can take steps to try to avoid a
fall in cash flow.
If you take on more business than you can
fulfil, there is a risk that you fail to deliver – or deliver work that is
substandard. This can give the customer an excuse not to pay and could
potentially mean a lost contract.
5. Having too much debt
If you have a lot of debt in your business,
this can become costly and start eating into profits. It could also put a black
mark on your credit record.