Cash flow analysis on green blackboard with dollar bills

Cash flow. Maybe you remember studying it for a semester or two years ago. Maybe your business has always been flush with cash and you’ve never given the concept a second thought.

Or maybe you’ve never even heard the words put together before.

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Whatever the case may be, here’s a quick refresher:

Simply defined, cash flow refers to the revenues a business generates (and collects) compared to the expenses it pays out over a fixed period of time. Broadly speaking, businesses bring in money through sales, financing, and returns on investments. They spend money on supplies and services, as well as utilities, taxes, and other bills.

However, business owners can’t predict the future—particularly when it comes to any unforeseen expenses they might incur (e.g., a truck breaking down prematurely and needing to be replaced, or a data breach resulting in a forced increase in IT spending). And they also can’t know for certain that their clients will pay their bills on time.

Together, these uncontrollable variables lead to a rather logical conclusion: Cash flow problems affect many businesses. And the data backs it up: According to a recent survey, three out of every five businesses experience cash flow problems. Still, while these issues are not uncommon, businesses owners are better off doing whatever they can to avoid them altogether.

5 symptoms of impending cash flow problems:

If your business is suffering from any of the five following symptoms, cash flow problems may very well be on the horizon.

  1. Your accounts receivables are high.
  2. You have too much inventory on hand.
  3. You’re overextending your business.
  4. Your sales are declining.
  5. Your business just isn’t profitable.

Download our free eBook, and you’ll learn cash flow basics, how to build a Cash Flow Statement for your business, and the best ways to manage your cash flow.

Learn the basics today and avoid cash flow problems in the future.

Download your free cash flow ebook today!
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Jonathan Michael
Jonathan Michael

Jonathan is the Engagement Marketing Manager for Palo Alto Software, and has spent the last 9 years developing and implementing digital marketing strategies. During that time, he has learned that empathy and authenticity are strengths by which companies can effectively engage with individuals at every point throughout the customer journey.