• Product
        • Planning Maestro
          • Product Overview
          • Watch Demo
          • Schedule a Live Demo
          • Plans
          • Service & Support
        • Capabilities
          • Consolidation
          • Budgeting
          • Forecasting
          • Scenario Planning
          • Performance Dashboards
          • Financial Reporting
  • Solutions
        • Industries
          • Nonprofit
          • Healthcare & Life Sciences
          • Finance & Insurance
          • Manufacturing & Distribution
          • Retail & Hospitality
          • Software & Technology
          • Other Industries
        • Integrations
          • QuickBooks Online
          • Microsoft Dynamics 365
          • Sage Intacct
          • NetSuite
          • Abila
          • Other Integrations
  • Resources
        • All Resources
          • Our Blog
          • Webinars
          • Whitepapers & E-Books
          • Videos
          • Customer Case Studies
  • Company
        • About Us
        • Leadership Team
        • Partners
        • Press & News
        • Awards
        • Careers
  • Contact
  • Search
  • Menu Menu
Help Hub
Search
Watch Demo Request A Quote

Our Blog

The 2 Biggest Reasons for Cash Flow Issues

May 5, 2020/ financial forecasting/By Jason Lin, Chief Financial Officer

Having a strong positive cash flow is the goal of every business. Knowing that you’ve got the resources available to run your business and handle any unexpected cash flow problems helps business owners sleep at night.

The question is, how do you maintain that flow once you’ve got it established? There are two scenarios that can lead to cash flow problems, and unfortunately, they aren’t uncommon. The first is having a stale cash flow projection. The second is overdue invoices. Worse, without diligence, you can encounter both problems together. And that can result in disaster for your business.

Cash Flow Problems Begin Here

The Risks of Stale Cash Flow Forecasts

While most companies forecast their cash flow, they don’t do it regularly and end up with stale projections. But does it really matter? Absolutely.

When your cash flow forecasts are old, they are inaccurate. They don’t match your current situation, and they haven’t taken into account any unknown expenses or unexpected inflows. And they certainly can’t indicate for you what the future holds.

Because of this, it’s difficult to see what is hurting or helping your cash flow. Are you being pulled down because of high-interest rate loans? Has one of your suppliers raised their price? Are there situations that are keeping you from having the cash to expand your business?

The Risks of Overdue Invoices

The other big risk to maintaining a stable cash flow is overdue invoices. Getting outstanding invoices paid is one of the biggest challenges businesses face, especially in recent years. It’s not uncommon for companies to use late payments as another form of credit, allowing them to better control their own cash flow to the detriment of yours.

The Perfect Storm

When these two problems are combined – stale cash flow projections and overdue invoices – it can spell disaster for a business.

With a drop in expected inflow due to unpaid invoices and lack of accurate visibility into your near-term cash flow, you have neither the ability to grow your business nor the cushion to deal with unexpected costs.

To prevent these issues, make sure you are committing time on a regular basis to updating and analyzing your cash flow projections. Your projections should be updated once a month to ensure they reflect your current cash position.

If you have customers that are habitually late with payments, reach out to them directly to find out what the issues are. Work with them to bring their payments in line or establish new terms to meet both their needs and yours.

Updating your projections and managing overdue payments are not low priority business tasks, but ones that can affect your ability to grow and manage the unexpected. Make the time to deal with these critical tasks to ensure your cash flow stability.

Protect your business and manage your cash flow problems with better insight using Planning Maestro. Centage Corporation’s Planning Maestro is a cloud-native planning & analytics platform that delivers year-round financial intelligence. With Planning Maestro, Centage offers the sophisticated features needed by small and mid-market organizations to integrate budgeting, forecasting, and deep data analysis within one easy-to-use, scalable SaaS solution.

https://www.centage.com/wp-content/uploads/2022/10/joshua-ness-9iqqFZ7OuwY-unsplash-1.jpg 1667 2500 Jason Lin, Chief Financial Officer /wp-content/uploads/2022/10/Group-780.svg Jason Lin, Chief Financial Officer2020-05-05 12:00:242022-11-11 14:57:54The 2 Biggest Reasons for Cash Flow Issues
Back to List

Also by This Author

  • The Real Budgeting and Planning Complexities for Today’s Businesses
  • Forever Changed: The Rise of Cloud FP&A for Business Budgeting
  • Forever Changed: Business Budgeting for SMBs
  • The New Normal: Financial Consolidation and Data Transformation – Bringing Value to FP&A
  • Driver-Based Planning: The Benefits & The Barriers – Is It Right for Your Organization?

View Demo Video

Request a Quote

Centage Corporation
330 Cochituate Road, #807
Framingham, MA 01701
P: 800.366.5111

  • Product
  • Industries
  • Integrations
  • Resources
  • Company
  • Contact
  • Help Hub
  • Watch Demo
  • Request a Quote

© 2022 Centage

Privacy Policy

Terms of use

Sitemap

  • Product
    • Planning Maestro
      • Product Overview
      • Watch Demo
      • Schedule a Live Demo
      • Plans
      • Service & Support
      • Back
    • Capabilities
      • Consolidation
      • Budgeting
      • Forecasting
      • Scenario Planning
      • Performance Dashboards
      • Financial Reporting
      • Back
    • Back
  • Solutions
    • Industries
      • Nonprofit
      • Healthcare & Life Sciences
      • Finance & Insurance
      • Manufacturing & Distribution
      • Retail & Hospitality
      • Software & Technology
      • Other Industries
      • Back
    • Integrations
      • QuickBooks Online
      • Microsoft Dynamics 365
      • Sage Intacct
      • NetSuite
      • Abila
      • Other Integrations
      • Back
    • Back
  • Resources
    • All Resources
      • Our Blog
      • Webinars
      • Whitepapers & E-Books
      • Videos
      • Customer Case Studies
      • Back
    • Back
  • Company
    • About Us
    • Leadership Team
    • Partners
    • Press & News
    • Awards
    • Careers
    • Back
  • Contact

    Quick Links

  • Help Hub
  • Watch Demo
  • Request a Quote

Stay Informed