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Cash flow refers to the movement of money flowing into and out of a business. Positive cash flow is when you bring in more money than you spend. It is what every business owner strives for because it enables you to pay your liabilities and invest in your business.
Conversely, if you are spending more money than you are bringing in, it is called negative cash flow. While there will be times when every business experiences temporary periods of negative cash flow, too many months of negative cash flow can - and will - cause a business to fail.
Cash flow problems aren’t a rare occurrence. They’re the leading reason businesses don’t make it. Research from the U.S. Bank found that poor cash flow management or a poor understanding of cash flow contributes to business failure roughly 82% of the time, more than any other single factor. The businesses that survive aren’t the ones that never hit a rough patch. They’re the ones with a system in place to see problems coming before the bank account does.
As tax and accounting professionals for small and medium-sized businesses, our expertise lies in helping business owners manage their cash flow better with the goal of increased profitability.
Here’s a distinction that trips up a lot of otherwise successful owners: profitability and liquidity are not the same thing. A company can show a healthy profit on its income statement and still come up short in the bank account because of how and when money actually moves.
JPMorgan Chase Institute research on hundreds of thousands of small business accounts found that the median small business holds only about 27 days of cash buffer — enough to cover roughly four weeks of expenses if revenue stopped tomorrow.
That’s a thin margin for error, and it’s exactly why business cash flow management has to be an ongoing discipline, not a once-a-year check-in. If your business has ever been profitable on paper while you were stressed about making payroll, you already know the gap firsthand.
A forecast is a decision-making tool. Without one, most owners are managing cash by feel, which works fine until timing turns against them. We build rolling 12-month cash flow projections that account for seasonality, payment terms, and the timing gaps between when you earn revenue and when it actually hits your account, so you can see a shortfall coming weeks or months in advance instead of the day it happens.
Cash flow planning works best when it’s connected to your broader financial picture, not treated as a standalone spreadsheet. That’s why our cash flow work is closely integrated with financial planning for your business — so decisions about hiring, expansion, or new equipment are made with a clear view of what your cash position can actually support.
Late-paying customers, long payment terms, and rising costs all compress your cash position from different angles. We help you tighten collections, renegotiate terms where it makes sense, and build the kind of billing discipline that keeps cash moving in rather than stuck in receivables.
Even well-run businesses occasionally need a buffer. We help you evaluate and secure the right bank financing option for your situation — whether that’s a line of credit, a term loan, or another form of working capital — before you’re in a crunch, not during one.
Most owners don’t realize they have a cash flow problem until it’s already disrupting the business. A few patterns worth watching for:
Warning sign 01
Warning sign 02
Warning sign 03
Warning sign 04
Warning sign 05You’re profitable on your income statement but regularly anxious about covering payroll or vendor bills
You’ve delayed paying suppliers, or used a personal card or personal savings to cover a business expense
Your accounts receivable balance keeps climbing and collections take longer than your stated terms
You’re surprised by cash shortfalls even in months you expected to be strong
You don’t have a rolling forecast, so you’re reacting to your bank balance instead of planning around it
If any of that sounds familiar, it’s a good time to improve cash flow management before a temporary dip becomes a pattern. This is where working with a dedicated advisor — rather than trying to solve it internally with a spreadsheet — tends to pay for itself.
Our CFO services give growing businesses that level of oversight without the cost of a full-time hire, and our broader advisory services can help you build the reporting rhythm and internal controls that keep cash flow visible month over month, not just at tax time.
If your business is suffering because you operate in cash crisis mode more often than not, give us a call today.
Cash flow issues rarely resolve themselves, and waiting until a shortfall is already underway limits your options considerably. The businesses that handle this well treat cash flow consulting as a standing part of their financial routine — reviewed monthly, adjusted as conditions change, and connected to the rest of their financial strategy — rather than an emergency call made once the damage is done.
Whether you need a one-time cash flow assessment or ongoing, hands-on support, we can build an approach that fits where your business is right now.
Call (347) 410-1839At a minimum, monthly — but many businesses benefit from checking weekly, especially if cash gets tight at points during the month. A monthly view can hide timing gaps that a weekly view catches, like a large payroll run landing before an expected customer payment clears.
A cash flow statement is a historical record. It shows how cash actually moved through your business over a past period. A cash flow forecast is forward-looking. It estimates future cash movements so you can catch a shortfall before it happens rather than explain it after the fact. Both matter, and they work best together.
It depends on the decision you’re making. Short-term forecasts (a few weeks) are best for day-to-day cash management, like knowing whether you can cover this week’s supplier payments. Medium-term forecasts (around 13 weeks) support debt and liquidity planning, while a rolling 12-month forecast is better suited to bigger strategic decisions like hiring or expansion.
It’s extremely common. If this sounds like your business, you’re in good company, and it’s very fixable with the right process in place.
A spreadsheet can work for straightforward situations, but it puts the entire burden of accuracy, updates, and interpretation on you. That said, software only tells you what the numbers are. It won’t tell you what to do about them. That’s where working with an advisor tends to make the real difference.
Act on it before the shortfall arrives, not after. Depending on the cause, that might mean tightening collections, adjusting payment terms with vendors, delaying a planned purchase, or securing business financing ahead of time so you’re not negotiating from a position of urgency. The earlier a forecast flags the problem, the more options you have to solve it.
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