Factoring Insights

Causes of cash flow problems

Invoice finance a growing business finance trend

Some primary causes of cash flow problems include:

  • Low profits and downturn in revenue.
  • Buying too much stock.
  • Allowing customers too much credit.
  • Overtrading.
  • Seasonal demand.
  • Bad debt.
  • Slow-paying accounts.
  • Increasing expenses.
  • Sudden or rapid growth.
  • Being undercapitalised.
  • Funding of long-term assets out of cash flow.
  • Paying cash for equipment or plant.