Cash is undeniably the lifeblood of your business. When it’s hemorrhaging money, your company is in critical condition. Even businesses making solid sales can fail due to poor cash management.
You can prevent financial disaster by recognizing these warning signs and taking action before it’s too late.
1. You’re Not Tracking Expenses
Many businesses fail to properly track expenses like utilities, rent, and payroll. This is dangerous because you can’t manage what you don’t measure.
The danger: If you’re spending more than your business earns, you’re headed for financial disaster without even realizing it.
2. You Can’t File Taxes On Time
Few expenses are as significant as your taxes. If you’re struggling to pay VAT, NIS, or income taxes on time, this is a major red flag for cash flow problems.
The consequence: Tax penalties and interest can create an even heavier financial burden.
3. You Struggle to Meet Payroll
Payroll is your second most important expense after taxes. If you’re stressed about paying your employees, you’re in serious financial trouble.
The impact: This affects not just your finances but also employee morale and retention.
4. You Can’t Pay Suppliers Timely
Even if you cover taxes and payroll, trouble paying suppliers indicates you don’t have enough cash for all expenses.
The domino effect: Late payment interest charges from suppliers whittle away your profits, making the situation worse.
5. Unpaid Customer Invoices Over 90 Days
If invoices remain unpaid for 90+ days, chances of collection drop dramatically. Only about 20% of these invoices get paid after this period.
The reality: If money isn’t coming in, you can’t pay your expenses—no matter how many sales you’ve made.
6. You Don’t Negotiate with Vendors
While retail prices may be fixed, business-to-business transactions often allow room for negotiation. If you’re not making counteroffers, you’re likely overpaying.
The opportunity: Regular negotiation can significantly reduce your cost of goods sold and improve margins.
🚨 Critical Alert
If you’re experiencing two or more of these warning signs, your business is in financial distress and needs immediate attention.
Don’t Wait Until It’s Too Late
Recognizing these signs early gives you the opportunity to take corrective action. The longer you wait, the more difficult recovery becomes.
“A wealthy person is simply someone who has learned how to make money when they’re not working.” – Robert Kiyosaki
Stay tuned for Part 2 next week, where we’ll explore practical solutions to stop the bleeding and get your business back to financial health.
Seeing these warning signs in your business? Contact us immediately for a financial health assessment and recovery plan!
