Cash flow issues don’t usually show up with flashing lights and alarms. More often, they sneak in quietly—small, subtle warning signs that are easy to ignore when sales are strong or things feel like they’re going well.
But here’s the hard truth: 60% of SMBs say cash flow is their #1 financial challenge (PYMNTS, 2023). And it’s rarely just one mistake. It’s usually a slow drip of small missteps that, over time, turn into big problems.
At Kafie Consulting, we often meet business owners with great products, strong teams, and promising numbers—but still struggling to make sense of why they’re always tight on cash. If that sounds familiar, let’s take a look under the hood.
5 Warning Signs Your Cash Flow Might Be in Trouble
Here’s what we see most often when cash flow is headed in the wrong direction:
1. Invoices Aren’t Getting Paid On Time
If your receivables are sitting unpaid for more than 30 days, you’re not just waiting on money—you’re financing someone else’s business. That delay eats into your working capital and slows everything down.
2. Revenue Is High—But Your Bank Account Doesn’t Show It
You’re selling, but not seeing the cash. That’s a signal something’s off in the timing of your inflows, your billing process, or your cost structure.
3. You’re Delaying Payments to Vendors
Pushing supplier payments because you don’t have enough in the account? That’s a sign your runway is shorter than it should be—and your vendor relationships could suffer too.
4. You’re Using Personal Funds to Keep the Business Afloat
We’ve all been there—but it’s not a long-term solution. If you’re consistently tapping into personal savings or credit, it’s time to reassess your business’s financial sustainability.
5. Tax Season Feels Like a Surprise (Every Year)
If tax time brings unexpected bills, it’s a signal your estimates, planning, or systems aren’t aligned with your cash flow reality. That unpredictability creates stress—and risk.
Quick Wins to Start Improving Cash Flow Today
You don’t need a total overhaul to start improving your cash flow. Try these small shifts that can create big impact:
- Use Forecasting Tools Like QuickBooks, Float, or Pulse
They help you see what’s coming, not just what’s already happened. Start by setting up a 90-day forecast and updating it weekly (eventually you will want to do this for a whole fiscal year and update at least monthly). - Automate Invoice Reminders
Use your accounting software to send automatic follow-ups after 7, 15, and 30 days. Set up an automatic report that is emailed to you weekly showing invoices over 30 days and follow-up via phone call. A polite but firm nudge can move cash faster. - Incentivize Early Payments
Even a 1-2% discount for payment within 10 days can boost liquidity. Try it with clients who consistently pay late. - Renegotiate Payment Terms With Suppliers
Ask for 45 or 60 days instead of 30. Many vendors will say yes—especially if you’ve been a reliable customer.
Cash Flow Health Check
Here’s a quick self-assessment to see where you stand. Try to answer yes to at least 3 of the 4:
| Question | Not Sure What to Do? Here’s a Tip. |
|---|---|
| I have a cash flow forecast for at least the next 3 months. | Start simple. Use your past 3 months’ expenses and income to build a forecast in Excel, within QuickBooks, or a tool like Float. |
| I’m not relying on credit cards or loans for daily operations. | Track your burn rate (discussed in Chapter 1). If you’re using debt to cover essentials, it’s time to rework your cost structure. |
| I collect most payments within 30 days of invoicing. | Shorten payment terms and follow up proactively. Use automation to avoid awkward reminders. |
| I have a cash reserve that covers at least 2 months of expenses. | Start small. Even setting aside 5–10% of monthly revenue adds up over time. Think of it as a buffer, not a bonus. |
Kafie Consulting Insight
Cash flow management is less about having all the answers, and more about having visibility and rhythm. Don’t wait until you can’t make payroll or miss a vendor deadline. A few smart shifts—like better forecasting, automation, and consistent monitoring—can help you feel less reactive, and more in control.Up next: Chapter 3: The Financial Metrics That Actually Matter (and which ones you can stop stressing about). Ready when you are!
