Post Content Type: Blog

Imagine your business is booming. Customers are lining up, invoices are rolling in and revenue looks great on paper. But when it comes time to pay vendors, cover payroll or invest in growth, you’re scrambling to find the cash. Sound familiar? Welcome to the world of cash flow.

Cash flow isn’t just about how much money your business makes—it’s about when that money arrives and whether it’s there when you need it. A profitable business can still find itself in financial trouble if cash flow isn’t managed properly.

So, what is cash flow in a business?

In this guide, we’ll break down why business cash flow matters, common pitfalls that trip companies up and actionable strategies to keep your finances in the green. Whether you’re an entrepreneur looking to scale or a seasoned business owner fine-tuning your financial strategy, this is your go-to guide for discovering:

• What is cash flow in a business?
• Why is cash flow important?
• Common challenges in managing cash flow
• How to calculate cash flow
• Importance of company cash flow management and analysis
• How to improve cash flow in a business 

What is cash flow in a business?

Cash flow is the pulse of your business’s financial health. It’s the money flowing in from customers, sales or funding, and the money flowing out to pay employees, cover expenses and invest in growth. And we know from recent spend trend data that highly profitable companies dedicate a large portion of their spending to growth measures like digital marketing. 

A well-managed cash flow ensures that your business has the liquidity to meet financial obligations, capitalize on new opportunities and maintain stability—even in times of uncertainty. Understanding and optimizing cash flow is essential for long-term success. Even profitable businesses can struggle if they don’t have cash available when they need it.

Incoming vs. outgoing cash flow

Business cash flow can be broken down into incoming cash flow (money flowing into the business) and outgoing cash flow (money leaving the business).

Incoming cash flow includes things like customer payments, loan proceeds, investor funding and revenue from selling assets.

Outgoing cash flow covers rent, payroll, supplier payments, taxes, debt repayments, operational costs and other expenses.

Positive vs. negative cash flow

Positive cash flow means more money is coming in than going out. This allows for reinvestment, savings and financial flexibility. 

Negative cash flow happens when expenses exceed income, leaving a business struggling to meet obligations. While occasional negative cash flow may not be a red flag, consistent shortfalls signal potential trouble. Think of it like a leaky bucket: sooner or later, you’ll run dry unless you patch the problem.

Types of cash flow

Cash flow breaks down into three main categories:

1. Operating cash flow – This is your day-to-day cash movement. It includes revenue from sales, payments from customers and expenses like payroll, rent and utilities.
2. Investing cash flow – Money going in and out related to investments. This could be purchasing equipment, acquiring another business or selling assets.
3. Financing cash flow – Funds moving between your business and investors or lenders, such as business loans, issuing shares, or paying dividends.

Understanding these cash flow types and categories can help you spot potential financial trouble before it happens. 

Why is cash flow important?

A steady, positive cash flow gives you the ability to cover expenses, invest in new opportunities and weather unexpected financial storms.

Here’s why visibility into cash flow should be a top priority for every business owner:

• It keeps operations running smoothly. If you don’t have enough cash on hand, even a minor delay in customer payments can lead to missed payroll, unpaid suppliers or service disruptions.
• It prevents reliance on expensive debt. When cash is tight, businesses often turn to high-interest credit lines or loans to cover expenses. Avoiding unnecessary debt keeps your business financially healthy.
• It fuels business growth. Whether you want to expand into new markets, hire additional staff or upgrade equipment, having available cash allows you to jump on opportunities without hesitation.
• It builds financial resilience. Unexpected costs, like equipment breakdowns or economic downturns, can cripple a business that isn’t financially prepared. A well-managed cash flow acts as a safety net.

“There’s a timing aspect to cash flow,” Jennifer McNamee, CPA and Senior Finance and Account Manager at Float, explains. “If you have a mismatch on the inflows and outflows, you could run out of cash. Then you have to tap into emergency solutions like debt or a line of credit, which are costly ways to finance your business.”

Common challenges in managing cash flow

Even businesses with strong revenue can run into cash flow problems. According to a Float study, 65% of SMBs are dealing with long processing times for financial transactions, and 59% are experiencing lengthy loan approval processes—both issues that can lead to significant cash flow issues.

Here are some of the most common challenges that can impact financial stability:

1. Delayed customer payments – When businesses rely on invoices with long payment terms (e.g., net 30, net 60), it can create cash flow gaps. If customers take too long to pay, it affects the company’s ability to cover its own expenses.
2. Large upfront costs – Some businesses, especially those in retail or manufacturing, must pay for inventory, raw materials or equipment long before they generate revenue from sales.
3. Unexpected expenses – Emergencies happen. Whether it’s equipment repairs, tax obligations or market downturns, unexpected costs can drain cash reserves quickly.
4. Poor payment terms with vendors – If your vendors require quick payments while your customers take longer to pay, you may find yourself constantly short on cash.
5. Seasonality – Maybe your business has peaks and valleys in operations, much like an ice cream shop would during the winter. Accurately forecasting seasonal dips in sales can help you prepare for the lull. 
6. Lack of cash flow visibility – If a business doesn’t regularly monitor cash inflows and outflows, it can be blindsided by a sudden shortage. Understanding cash flow trends through frequent reporting is key to preventing financial surprises.

How to calculate cash flow

Calculating cash flow is essential for understanding your business’s financial health. Accurate visibility into cash flow requires diligent expense management, revenue tracking and proactive forecasting. The primary tool used to calculate it is the cash flow statement, which provides a snapshot of how cash moves in and out of your business over a specific period.

You don’t need to be a CPA to make sense of this (although a cup of strong coffee might help). To oversimplify it, you can calculate cash flow with this basic formula:

Reading your cash flow statement will be slightly more complex. Cash flow statements track how money moves in and out of your business and are divided into three main sections, which you can see in the example below.

Operating activities cover cash generated from day-to-day business operations. It starts with net income, then adjusts for non-cash expenses like depreciation and amortization. It also accounts for changes in working capital, such as money tied up in accounts receivable, inventory and accounts payable. If your company sells products or services on credit, cash flow may be delayed, while paying suppliers later can temporarily improve cash flow.

Investing activities focus on buying and selling long-term assets. This includes capital expenditures (CapEx), like purchasing equipment or property, which reduce cash. On the other hand, selling assets or investments brings in cash. This section also includes buying or selling marketable securities or acquiring other businesses.

Financing activities track cash movements related to investors and lenders. Raising funds through loans or issuing stock brings in cash, while repaying debt, paying dividends, or buying back shares reduces it. This section reflects how your company funds its operations beyond its core business activities.

At the bottom of the cash flow statement, all these cash movements are added up to show the net increase or decrease in cash for the period. This is reconciled with the beginning cash balance, leading to the final ending cash balance—the actual cash the business has on hand at the end of the reporting period.

Importance of company cash flow management and analysis

Analyzing cash flow will help you make smarter business decisions. Here’s how: 

• Identifying financial trends: By consistently analyzing cash flow, you can recognize patterns in revenue and expenses, such as seasonal dips, delayed customer payments, or unexpected cash shortages. This allows your business to plan ahead, ensuring you have enough cash reserves during slow periods and optimizing spending during peak times.
• Ensuring liquidity: Maintaining a steady balance between cash inflows and outflows ensures that your business can cover essential expenses like payroll, rent and supplier payments without disruption. A clear picture of your cash position helps prevent cash shortages that could jeopardize operations.
• Avoiding unnecessary debt: Poor cash flow management often leads businesses to rely on short-term loans, high-interest credit lines or emergency funding to stay afloat. By proactively monitoring cash flow, you can better anticipate financial needs, reduce reliance on costly borrowing and allocate funds more efficiently to support sustainable growth.

But cash flow management isn’t all about saving for a rainy day. Once you’ve mastered it, you can use cash flow to help your business grow by reinvesting strategically. “Sometimes, businesses get too focused on cash preservation and miss out on opportunities for growth,” says Jennifer. “Finding the right balance between saving and strategic reinvestment is key.”

With a balanced approach, reinvestment can help you expand operations by opening new locations, hiring employees, or increasing production capacity. It can support technological upgrades, investing in tools or automation that improve efficiency and productivity. 

Allocating funds to marketing efforts can drive customer acquisition and increase revenue, while reinvesting in product development fuels innovation by supporting research and development. Overall, sound cash flow management sets you up for sustainable success in your business. 

How to improve cash flow in a business

Here are 7 ways to take back control and improve your business’ cash flow.

1. Speed up receivables

One of the easiest ways to improve cash flow is to get paid faster. Send invoices as soon as work is completed and set clear payment terms. Consider offering early payment discounts to encourage quicker transactions, and automate reminders to follow up on outstanding invoices. The faster money comes in, the less likely you are to run into cash shortages.

2. Negotiate better payment terms

Negotiating extended payment deadlines with vendors gives your business more flexibility. If possible, arrange staggered or milestone-based payments for large projects to spread costs over time. Many vendors are open to flexible arrangements, especially if you maintain a strong relationship.

3. Cut unnecessary expenses

Conduct regular audits of your expenses to identify areas where you can cut back costs. Cancel unused subscriptions (hey, we’re all guilty of it!), renegotiate contracts and consider shifting to more cost-effective operational models. Even small savings can add up to significant cash flow improvements over time.

4. Maintain a cash reserve

Having a financial cushion is crucial for handling unexpected expenses. Set aside a portion of your profits into an emergency fund that can cover at least three to six months of operating costs. Consider placing these reserves in a high-yield account to maximize returns on idle cash while keeping it accessible when needed. This ensures that you have funds available to navigate downturns without relying on expensive debt options. 

5. Optimize inventory management

For product-based businesses, inventory can be a major cash drain. Avoid overstocking by closely monitoring sales trends and using just-in-time inventory systems to reduce holding costs. Clearing out slow-moving stock through discounts or promotions can also free up cash that’s otherwise tied up in unsold products.

6. Leverage cash flow management tools

Technology can help you track and improve business cash flow. Software like Float provides real-time insights into cash movements, helping you forecast potential shortfalls and make informed decisions. Automating financial tracking also reduces human error and ensures you always have a clear picture of your financial standing.

7. Diversify revenue streams

Relying on a single income source can be risky. Consider expanding your offerings, entering new markets or adopting subscription-based models to create more predictable revenue. Upselling and cross-selling to existing customers can also improve business cash flow without increasing acquisition costs.

Get visibility into your cash flow with Float 

Cash flow management doesn’t have to be a guessing game. With Float, you gain real-time insights into your business’s financial health with a leading spending and expense management platform that helps you track outflow to make informed financial decisions. Whether you’re looking to streamline operations, cut costs, or plan for future growth, Float gives Canadian businesses tools needed to stay on top of cash flow with confidence. Try Float today and take control of your business finances.

Your cash flow statement can provide precious insights about the health of your business and give you the information you need to make strategic financial decisions. But for small business owners who don’t have an accounting background, reading financial statements can feel like decoding ancient Egyptian hieroglyphs. Creating them can be just as confusing. To get value out of your cash flow statements, you need to know when to use them and how to analyze them.  

In this guide we go beyond the basics of what is business cash flow. We’ll cover how to prepare a cash flow statement, illuminate the nuances of direct vs indirect cash flow statement methods and take a look at a cash flow statement example so you can read your own like a pro.

What is a cash flow statement?

A cash flow statement (CFS) summarizes the inflow and outflow of cash in your business over a specific period of time, usually a month. It tells you how much operating cash you have on hand to spend. This cash contributes to your business’ liquidity—your ability to pay bills and debts, also known as liabilities, with cash or the current assets you own. Along with the income statement and balance sheet, it’s one of the three core financial statements that businesses are required to generate.

Who prepares cash flow statements? 

We hate to break it to you, but every small business owner should know how to either prepare or read a cash flow statement. It can give you a serious edge when you’re making business decisions. If you have a bookkeeper, they can prepare your CFS and give you insights about how your cash flow is doing. In larger companies, the accounting team is usually responsible for creating cash flow statements as part of quarterly or annual financial reporting. 

Why creating a cash flow statement is important for your business

Managing cash flow is the cornerstone of strong operations. If you don’t have enough cash, you can’t cover your regular bills, or pay yourself or your employees. About 54% of new small- and medium-sized businesses (SMBs) in Canada experience cash flow issues and two-thirds of SMB owners agree it’s important to improve cash flow management efficiency. 

Creating and analyzing your cash flow statements on a regular basis gives you insight into how well you’re managing cash and whether you’re striking a healthy balance between your investments and your cash on hand. 

Understanding your cash flow statement can help you assess whether you’re generating enough cash to cover your regular operating expenses. If you’re struggling with cash flow, it may be time to seek out a loan or find ways to cut costs. 

Looking at your cash flow over time can help you determine whether your financial strategy will work for your business in the long run. It can also help you figure out whether you’re ready to invest in the next stage of growth and provide a starting point for your financial strategy for expansion efforts, like hiring more team members or buying materials for a new product line.

How to prepare a cash flow statement

There are two main approaches you can take to generating your CFS: the direct method and the indirect method. Understanding the direct vs indirect cash flow statement methods can help you determine which one is the right fit for you and your business—one of them is definitely the better option for growing businesses (and busy owners), but we’ll let you decide. 

Cash flow statement direct method

The cash flow statement direct method requires you to keep a record of every single time cash leaves or hits your bank accounts during the reporting period. When you’re ready to prepare the CFS, you subtract the total cash spent from the total cash earned. 

If you’re using the direct method, it’s important to accurately identify cash inflows and outflows. For example, outstanding invoices in your accounts payable (AP) or accounts receivable (AR) don’t count towards your cash flow because you haven’t actually sent or received that money yet. 

You also don’t need to list individual purchases made with your credit cards or revolving line of credit as part of your cash outflows. You only need to include the payments you make from your bank account when you pay down the balance. 

Frankly, the direct method can be pretty tedious and lead to headache-inducing data entry errors. It works well if you don’t have frequent cash inflows and outflows, so it’s a better option for freelancers or sole proprietors. Bear in mind that even if you calculate your cash flow using the direct method, you need to use the indirect method to reconcile the CFS with your income statement.

Cash flow statement indirect method

The cash flow statement indirect method requires you to pull up your income statement, where you’ll find your net income—your business’ bottom line. That number is your starting point. Then, you’ll need to make adjustments to the transactions listed on your income statement balance sheet that don’t truly reflect the movement of cash into and out of your bank accounts. 

Using the cash flow statement indirect method is more technical than the direct method. If you have a bookkeeper or accountant, this is likely the method they’ll use. If you want to get hands on with your finances as a small business owner, learning the indirect method can save you some time and effort when you’re generating a monthly, quarterly, or annual CFS yourself.

How to read a cash flow statement

Maybe your bookkeeper just emailed you your first official cash flow statement. Perhaps you’re feeling ambitious enough to try out the indirect method of calculating last month’s cash flow for yourself. Either way, congratulations are in order: prioritizing expense management and getting familiar with your financial statements is a rite of passage for any small business owner. But how the heck do you read this thing? 

Let’s walk through a simple cash flow statement template to give you a better idea of what you’re looking at.

At the top of the cash flow statement you’ll find the net income number that should match net income on your income statement. In this cash flow statement example, red numbers are subtracted from net income while black numbers are added to net income. 

It’s easier to read a cash flow statement if you know what’s going into it. The cash flow statement format includes three main sections: cash flow from operations, cash flow from investing, and cash flow from financing. If you were to prepare this cash flow statement using the indirect method, here’s how you’d fill out the three sections:

1. Cash flow from operations

First, you’ll calculate cash flow that comes from your everyday business operations. From your net income, you’ll need to add back transactions that reduce net income on the income statement but do not affect cash, including depreciation, amortization, decreases in AR, and increases in AP. 

You also need to subtract expenses that increase net income on the income statement but do not provide more cash, like the increase in AR and inventory purchases. 

In this cash flow statement example, we’ve listed depreciation, increase in AP and decrease in AR as additions in black and cash payments made to suppliers and employees and an increase in inventory as subtractions in red.

2. Cash flow from investing

Next, you’ll calculate cash coming in from investments, such as selling an asset or receiving returns from an investment into your bank account. You also need to subtract the purchase of investments or assets—like machinery, vehicles, appliances or property—if you paid by cash. 

Here, we’ve listed the purchase of equipment as a subtraction. However, if the business owner put this purchase on a credit card, they should include this amount in the total notes payable line in the month that they paid down the credit card balance. 

3. Cash flow from financing

Finally, you’ll add in cash received through financing, such as a loan balance or—for public companies—issuing stock, and subtract loan repayments, interest paid or dividends paid. Transactions related to business loans are listed as notes payable. 

In our cash flow statement example, the number is black because the business received a loan that counts towards increased cash on hand. When a repayment is made, that number would be listed in red and subtracted from the total.  

As you can see from this cash flow statement template, while the business had a net income of $75,000, the cash available in the business that month was $31,000. With this information, the business owner knows that they’ve only got $31,000 to cover payroll, pay their taxes and invest in the business at this point in time. 

Business owners should return to their cash flow statement monthly or quarterly to better understand and optimize their cash management. It’s important to note that positive cash flow isn’t always good and negative cash flow isn’t always bad. For example, this business spent money on equipment purchases. While this represents negative cash flow from investing, using extra cash on hand for new equipment is a good investment in business growth. 

On the other hand, having an excess of positive cash flow several months in a row could mean that you’re not allocating the cash available in your business effectively. Cash is best used for reinvesting in your business or earning interest. To make sure your cash is working hard for you at all times, it’s smart to keep it in a high-yield account like the one Float offers that gives you 4% interest on your balance.

Use Float to take control of your cash flow

It never hurts to have some extra cash on hand. Using business credit cards can give you more flexibility around your cash flow and empower you to seize opportunities even if your invoices haven’t been paid. 

Float combines corporate cards with intuitive expense management software. Providing Float cards for your team allows employees to pay with the company card, rather than paying expenses out of their own pocket. This means you can get real-time visibility into spend, rather than waiting on them to submit their receipts. You can also earn interest on the cash you keep in Float. 

With Float, you can track all of the expenses you put on your corporate cards in one place and seamlessly pay your vendors, subscriptions and employee reimbursements through a single platform. Float integrates directly with your accounting software, so incorporating expenses paid through Float in your cash flow statement is frictionless.
Get the cash you need, when you need it. Try Float for free and boost your cash flow with high-limit corporate credit cards and 4% interest on funds held in your Float Balance.

If you’re running a small business, chances are you’ve experienced cash flow problems at some point. The stress of not knowing if you’ll have enough to cover payroll, supplier payments, or office rent can keep you up at night. 

It’s frustrating to work hard, bring in sales, and see profits on paper, only to find yourself short when an unexpected invoice lands or an essential expense arises. 

You may feel alone in these struggles, but you have more company in that leaky boat than you realize. In Canada, 60% of small and medium-sized businesses (SMBs) report ongoing cash flow challenges. Look at your small business neighbours. Yep, they’re worried about this, too. This number is only slightly better for established businesses. According to Float data, 48% of SMBs that have been operating for 20+ years reported insufficient cash flow as a top financial challenge in 2024.

The good news? You’re not alone, and there are ways to take control. Plus, we get what it’s like running a small business in Canada. We’ve got you covered.

In this guide, we’ll walk you through the most common cash flow issues small businesses face, why they happen and—most importantly—how to solve them.

Common business cash flow problems

Cash flow problems are one of the biggest challenges small businesses face, and they can feel relentless. When cash runs low, every unexpected expense or delayed payment adds stress, making it feel like you’re always on the edge of a financial crunch.

Why are cash flow issues so common in small businesses?

A few patterns crop up when business owners dig into the dark corners of their cash flow management. (It’s okay, we brought flashlights.) Have a look at the list and see if these sound familiar.

Have you ever struggled with:

• Unpredictable revenue cycles that make it hard to plan ahead?
• Customers who delay payments, leaving you scrambling to cover your expenses?
• Large upfront supplier costs that tie up cash before you’ve even made a sale?
• Rising operating expenses that creep up month after month?
• Incomplete or poor financial forecasting leading to unexpected shortfalls?

Many small business owners feel like they’re constantly playing catch-up, shifting funds around and hoping nothing major goes wrong.

We get it. But hope isn’t a strategy. Understanding what’s causing your cash flow struggles is the first step to fixing them. So, let’s dig in together.

💡Pro Tip: Start with this guide to get the basics on all things cash flow management.

How many businesses in Canada fail due to cash flow problems?

Cash flow problems impact your financial stability, but beyond that, they also affect your peace of mind. Every small business owner knows the sinking feeling of realizing that despite solid revenue, cash is tight again, and making it through the month will require careful juggling. In fact, 29% of small businesses ultimately have to close because they run out of money, and 67% of small business owners rely on personal funds to keep things afloat—an unsustainable strategy in the long run.

Fears about keeping your business in the black aren’t unfounded. Almost 20% of business owners surveyed have faced past bankruptcy or insolvency. How high is the risk of a business failing? It can vary, but these are not easy times. In the first quarter of 2024, insolvencies were up 87% over the year before, with experts warning of a high number of quiet business failures hiding behind that number.

Small business cash flow problems can pose real risks for business owners. Even if your business seems to be bringing in new customers and making plenty of sales, these signs can hide real troubles. Learning how to solve cash flow problems could be crucial to your business building the longevity you’ve dreamed of.

Business types prone to cash flow issues

We hate to be the ones to say it out loud, but certain industries are more susceptible to problems with cash flow than others. Common culprits include those that require large upfront investments, have long payment cycles or experience seasonal fluctuations. 

What might this look like in your business? Common examples include:

Construction firms

Long payment terms and high material costs create cash flow gaps. You may end up trying to cover multiple payroll cycles (and even overtime) long before you’re paid for a job.

Retailers and wholesalers

Balancing your stock levels is a juggling act. Holding too much inventory ties up cash, while slow-moving stock leads to liquidity issues.

Agencies or companies with extended payment terms

If you’re a recruiter, you may not be able to bill your client until you’ve completed the placement of a candidate. Payment delays from clients can disrupt payroll and make it difficult to operate smoothly.

Hospitality businesses

You may have months where business slows to a trickle. Seasonal variations impact revenue consistency, making it hard to cover fixed costs during slow months.

Startups

More invoices and fees? We haven’t billed a single customer! If this thought has tightened the tension around your skull more than once, this could be you. Heavy upfront costs before revenue kicks in can leave early-stage businesses tight for cash.

If your business falls into one of these categories, proactive cash flow management is critical.

10 common cash flow problems (and how to fix them)

While cash flow issues are common, they’re not inevitable. Understanding why they happen will help you start taking proactive steps to regain control. With help, you can stabilize your cash flow and set your business up for long-term financial health.

Some of these challenges can be made easier with financial tools that give you better control and visibility over your cash flow. We’ll walk you through 10 common cash flow problems and solutions to help you tackle them.

1. Late customer payments

Many small businesses operate on tight margins, so when customers don’t pay on time, it can throw everything off balance—like famous Italian leaning tower levels of off balance. You still have bills to pay, employees to compensate and suppliers to keep happy. When you’re chasing overdue invoices, it takes time away from running and growing your business. 

Solution: Set clear payment terms, offer early payment discounts and use automated invoicing tools to follow up on overdue payments.

2. Revenue fluctuations

Not every business has steady income each month. Seasonal businesses or those affected by market shifts often experience unpredictable revenue cycles. You may have a great month followed by a slow one, making it tough to manage expenses consistently.

Solution: Build a cash reserve during peak periods, diversify revenue streams and forecast cash flow regularly.

3. Upfront supplier payments

Many businesses must pay suppliers before they generate revenue. This creates a cash crunch, especially for companies that need to invest heavily in inventory, materials or services before getting paid.

Solution: Negotiate better payment terms, explore just-in-time inventory management or use credit options to delay payments.

4. High overhead costs

Fixed costs like rent, utilities and payroll don’t go away, even when business slows down. If expenses keep creeping up while revenue stays the same, cash flow gets squeezed tight like a pair of too-skinny jeans.

Solution: Audit expenses, cut unnecessary costs and consider flexible lease options or remote work setups.

5. Poor financial planning

Many small business owners focus on sales and operations but overlook financial forecasting. Many have business acumen and strengths that may not include deep financial literacy. Without a clear cash flow plan that includes cash flow statements and other key financial planning documents, unexpected expenses or slow months can cause financial stress.

Solution: Use accounting software to track cash flow, create realistic budgets, and plan for potential shortfalls.

6. Expense management inefficiencies

Unmonitored spending by employees or disorganized expense tracking can drain cash reserves faster than expected. Without proper oversight, it’s easy to lose track of where money is going.

Solution: Implement an expense management system to monitor and control spending in real time.

7. Tax compliance surprises

Nothing disrupts cash flow like an unexpected tax bill, and with online access to everything, there’s no pretending anything got lost in the mail. Many small businesses underestimate their tax liabilities or miss filing deadlines, leading to penalties and financial strain.

Solution: Set aside tax reserves, use automated tax software and consult a professional accountant to avoid surprises.

8. Inventory mismanagement

Too much inventory means cash is tied up in unsold products, while too little inventory can lead to missed sales opportunities. Striking the right balance is essential.

Solution: Use inventory management software to optimize stock levels and reduce holding costs.

9. Emergency expenses

Unexpected costs like equipment breakdowns, legal fees or emergency repairs can drain your cash reserves overnight. Without a financial cushion, these expenses can be devastating.

Solution: Maintain a contingency fund and explore business insurance options to protect against unexpected expenses. You can even earn interest on those funds, if you opt for a high-interest yield account, like Float Yield, which offers 4%.

10. Access to credit

When cash is tight, having access to financing can make the difference between surviving and shutting down. But many businesses struggle to secure loans or credit lines when they need them most.
Solution: Establish good credit, explore business lines of c

How Float can help you manage cash flow with confidence

Float provides an all-in-one expense management platform that helps you track spending in real time, automate expense approvals and gain critical visibility into your financial health.

With Float’s corporate cards, you can set spending limits, automate receipt collection and prevent overcharges. This ensures that every dollar spent is accounted for and surprise expenses don’t catch you off guard. (Less panic means you get to spend a few weekends relaxing instead of transferring money around, hoping to cover everything.)

Float also helps you gain financial control by integrating corporate cards with real-time expense management. Unlike traditional solutions that encourage spending, Float is designed to help you spend smarter while offering up some pretty appealing rewards, like high-yield accounts. 

Proactive cash management is essential, but business cash flow problems don’t have to derail your business. The key is to stay proactive, monitor your finances closely and leverage the right tools to improve business cash flow management.

Looking for smarter ways to manage your business expenses? Explore how Float can help improve your cash flow visibility and control.