Cash flow problems can cripple even profitable businesses. The key to solving these issues starts with understanding their root causes. Common culprits include too much inventory, excessive owner withdrawals, slow-paying customers, high overhead, excessive debt, undercapitalization, unexpected events, employee theft, excessive fixed asset purchases, operating losses, premature bill payment, and inadequate pricing. While the symptoms might look similar – not enough cash to meet obligations – the solutions vary depending on the underlying cause.

Early detection and prevention are critical. Many business owners only realize they have a cash flow problem when they can't make payroll or pay important bills. By then, the situation is often critical. Instead, regularly monitor your key financial metrics to spot potential issues before they become emergencies. Set up systems to track accounts receivable aging, inventory turnover, and operating expenses compared to revenue.