Cashflow Warning Signs Knowing WHY is the key

With all the fluctuations in business it is at times difficult to ascertain whether the merry go round of ups and downs is just a normal pattern and will change again as it always does or are the signs that your cashflow might actually be in trouble.

Understanding WHY there is a cashflow issue is the key. Is this normal or is there something underlying the why that is a bit scarier. By knowing the why, you will be able to potentially do something about it before it is to late or take on board the fact it is just part of normal trading and it can be controlled.

YOU NEED TO UNDERSTAND WHY

Some early warning signs might be :

?        Going over your bank overdraft / credit facility constantly

?        Part paying suppliers

?        Having to pay suppliers in cash (not having a credit facility)

?        Having trouble paying creditors and wages

?        Having trouble meeting compliance payments (tax)

?        Concentrating on cash management not running the business

?        Not meeting projected forecasts repeatedly for no external reason

?        Having to continually put of growth decisions (capital purchases,etc)

?        Not being able to employ more staff when you need to

?        Sales increasing, profits increasing cashflow declining

Many of these things are just part of a normal businesses trading cycle mainly due to timing and could just simply be one off scenarios. But unless you really understand the WHY it is happening you will never be sure. So as with most things in business and especially when it comes to Cashflow Management complacency or burying your head in the sand could cause you big issues very quickly.

As always if you would like some more information or have some questions on Cashflow Management please let me know.

Michael Corner