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Top Three Causes of Cash Flow Problems

  • Posted 28th July 2015

Top Three Causes of Cash Flow Problems

A cash flow problem can be very difficult to live with. It is still a significant challenge that a large number of businesses face today. So, what are the factors that cause cash flow problems in your business? You need to read on below to find out. Top Three Causes of Cash Flow Problems Bad collection on your cash receivables After you make a sale of any products or services of your company, it is important you collect the costs on that sale in a timely manner. That is because if you fail to collect the owed amount at the right time, you will be suffering from a cash flow problem pretty soon. Expenses is higher than sales As a business owner, you need to cut your expenses like staffing, costs of equipments, and office costs wherever you can but without affecting your business. If you fall short to do so, your expenses will soon be high and your business will not have enough cash to meet the expenses sooner or later. For this reason, you need to monitor and keep track of your business spending right from the beginning. This way you will able to know where and how much money is spent on. Low sales Having a downturn in sales is one of the reasons that lead to shortage of cash in your business. Thus, you need to provide services that can make your existing clients happy and satisfied. At the same time, you need to encourage them by offering different perks and discounts in your services. Cash flow problems can lead to many issues that can eventually cause insolvency proceedings. This is why such problems need to be solved immediately once they occur. If you need a practical solution to handle your cash flow issues, contact our specialist advisers at 020 7060 9556 or email us at info@harleystreetaccountants.co.uk.  

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