Cash Flow Problems
In a future post I will talk about how to alleviate Cash Flow Problems. In some of my previous posts in other blogs I have mentioned some causes of Cash Flow Problems, but in this post I thought I would identify as many causes of Cash Flow Problems as I can. Cash Flow Problems are caused by:
- Too much inventory.
- Too much salary to owner or too many withdrawals by owner.
- Doing business with customers who are slow paying or who do not pay at all.
- High Overhead too high.
- Too much interest expense on debt.
- Under capitalization from the beginning
- Unexpected casualty not covered by insurance.
- Excessive purchases of fixed assets and capitalized costs.
- Operating losses
- Paying bills too quickly
The above bullet points represent the key causes of Cash Flow Problems. As previously stated in future posts I will identify ways to alleviate Cash Flow Problems once these events occurs.
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