What a Useful Cash-Flow Review Can Reveal

Begin with reliable information

• Reconciled bank and credit-card accounts
• Accounts receivable and payable
• Payroll and payroll-tax obligations
• Loan and credit-card payments
• Sales and expense history
• Planned purchases, distributions, and tax payments
• A short-term cash forecast

1. Are customers paying slowly?

Review how long invoices remain unpaid, which customers create recurring delays, whether invoices are issued promptly, and whether deposits or progress billing could improve timing.

2. Are expenses rising faster than revenue?

Compare expenses with prior periods and related revenue. Separate recurring costs from unusual purchases, and distinguish spending that supports revenue from spending that may no longer provide value.

3. Does seasonality create predictable pressure?

Recognizing a recurring pattern early can help the business build reserves, adjust purchase timing, strengthen collections, and plan staffing or inventory.

4. Can the business afford a major decision?

Before hiring, buying equipment, adding a location, or making a large distribution, model upfront and ongoing costs, expected benefits, working-capital needs, financing, taxes, and a reasonable downside scenario.

5. Is debt helping or creating strain?

List each loan, line of credit, and card balance with its rate, payment, maturity, and available credit. Repeated borrowing for ordinary operations may indicate a pricing, collection, spending, or profitability issue.

6. Are taxes and owner payments being planned?

A bank balance can be misleading when part of it is already needed for payroll taxes, sales taxes, estimated income taxes, or other upcoming liabilities.

7. Is the business maintaining enough flexibility?

There is no universal reserve target. Consider revenue stability, operating costs, customer concentration, access to credit, and what large payments are due in the next 90 days.

A practical monthly review

1. Reconcile financial accounts.
2. Review receivables and overdue invoices.
3. Review upcoming bills, payroll, debt, and taxes.
4. Compare actual cash activity with the forecast.
5. Update the next 8–13 weeks.
6. Investigate meaningful changes and assign follow-up actions.