Managing cash flow is such a difficult, precarious thing for any company. Cash flow is also one of the most critical aspects of any company, but especially an early-stage startup or younger firm. Bookings are great, and revenue from bookings is fantastic…but they don’t necessarily portend positive cash flow. Companies need real money flowing in (and out) of their bank accounts in order to properly run a business.

You can still very well miss your cash flow goal, the nightmare scenario for a CFO or CEO.

Fortunately, with the right Quickbooks Analytics reports, you can forecast if you’re actually going to hit your cash flow goal or not. Knowing well ahead of time that you’re not on track to meet your monthly, quarterly or annual cash flow goal will allow you to pull the right levers and take the necessary steps.

Look out for these 3 warning signs that you might miss your cash flow goal.

Your Overdue Accounts Receivables are Trending in the Wrong Direction

The first step toward achieving positive cash flow is making sure you get paid for the goods and services you are providing for your customers. After all, this is the best (and likely only) way to bring money in…but not if your customers aren’t paying their invoices on time, or at all!

This puts the onus on you to hunt down those delinquent or overdue invoices and start putting real pressure on customers to pay. Missing one payment or being a month late isn’t ideal, but also isn’t necessarily disastrous. However, if that month turns into two, or three or more? That can really throw all your financial books out of whack. Don’t let your Accounts Receivables get to this point above, where more and more customers are paying later and later each month.

You’re Sending – and Collecting – Fewer Invoices

Sending fewer invoices means that you’re booking fewer deals, a problem for your Sales VP and team to solve. This might be attributed to a down month or two, or it could be a more serious indicator that your team might be bumping up against its limits within the market.

Collecting a smaller percentage of your invoices? That is another problem altogether, one that needs to be addressed by your CFO or office manager in charge of dealing with customer payments. The first thing is to figure out why such a small percentage of your invoices are being collected. Is this due to your customers withholding payments due to dissatisfaction with your product? Have you recently changed your payment terms, for example from 30-day terms to a 60-day term? Is there a disconnect between the payments coming in and the data being entered correctly into Quickbooks? Whatever the case, collecting only 20% of your invoices – as this company above did in May – is a death knell to your cash flow goals.

Your Own Expenses are Increasing Disproportionately

Running a company isn’t cheap. There are a host of expenses that you have to incur, including:

  • Cost of producing the goods or services that you sell

  • Employee salaries and benefits

  • General upkeep of office, such as electricity bills, water, heating, etc.

  • Software needed to run your business, like, Quickbooks or InsightSquared

  • Marketing campaigns and advertising spend

This is but a tip of the iceberg of all the expenses that go into running a company. You need to keep an eye on these costs, broken down into very specific categories, to determine if you actually need to spend or the money in all of these areas, or if some are superfluous.

If your costs are rising month-over-month – as this company’s appear to be – you need to be able to justify those increasing expenses. Additionally, they need to be reconciled with the money you’re actually bringing in. If your revenues are increasing at a similar or greater rate, you can get away with rising costs. However, if your revenues are stagnating or declining at the same time, you will run into some serious cash flow problems.


It goes without saying, but you don’t want your company to run out of cash. If it looks like you are headed that way, you can take the necessary steps to avoid hitting rock bottom. Look out for these 3 warning signs that you might miss your cash flow goal to steer your company out of the red and back into the black.

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