Cash Flow Problems

Sat, 07 Feb 2009 18:16:00 GMT

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.