What Are Examples of Cash Flow Problems?

In this post, we’ll break down the most common examples of cash flow problems—and why they matter. At first glance, it might seem like cash flow issues only arise when sales are slow or clients don’t pay. But the reality is more nuanced. Even fast-growing, profitable businesses can find themselves short on cash if they don’t manage the timing, structure, and discipline of their inflows and outflows.

Key Takeaways

• Cash flow problems aren’t always caused by poor sales—they often result from poor visibility or timing

• Recognizing early examples helps you prevent full-blown crises

• Fixing the root cause requires systems, not shortcuts

Slow Accounts Receivable

One of the most common cash flow problems is slow-paying customers. You’ve done the work, sent the invoice, and now you’re waiting 30, 60, sometimes 90 days to get paid. Meanwhile, payroll is due, vendors are expecting checks, and your operating costs continue.

This timing mismatch between money going out and money coming in creates a gap that, if unmanaged, can force you to borrow or delay critical expenses. Many businesses rely on short-term financing to float this gap, which works temporarily but can create long-term strain if collections remain slow.

Overextended Growth

Ironically, growth can cause cash flow issues. When sales increase rapidly, it often means higher upfront costs—hiring, equipment, inventory, delivery—all before the corresponding revenue is collected. If that growth isn’t carefully forecasted, you can run into a situation where you’re cash poor, even though business is booming.

This is known as “growing broke.” It happens when a business commits to expansion without understanding its working capital needs. The faster you scale, the more cash you burn—unless systems are in place to manage the transition.

Large One-Time Expenses

Unexpected large expenses—like new equipment, legal fees, or facility repairs—can quickly deplete cash reserves. Even planned investments can create issues if they’re not timed correctly or if you don’t have a financial buffer in place.

Here are a few examples of cash flow disruptions from large expenses:

• Purchasing a fleet of vehicles without staggered payments

• Paying an annual software contract in full instead of monthly

• Covering employee bonuses without budgeting for the impact on operating cash

While these aren’t inherently bad decisions, poor timing or lack of planning can turn them into painful lessons.

Inventory Tied Up Too Long

Product-based businesses often run into cash flow problems when too much cash is tied up in inventory. If you’ve bought more than you can sell in a given cycle—or you’re sitting on slow-moving stock—you’ve effectively locked your money in a warehouse.

This can limit your ability to invest in marketing, staffing, or fulfillment when demand picks up. Inventory issues become cash flow issues when purchases aren’t matched to sales velocity.

Poor Forecasting and Lack of Visibility

Sometimes, the cash flow problem isn’t in a specific transaction—it’s in the lack of financial clarity. Many businesses operate without a weekly or monthly cash flow forecast. They rely on the bank balance instead of a forward-looking view. The result? Surprises. Missed payments. And shortfalls that could’ve been avoided with a little more foresight.

When you don’t know your obligations three, six, or eight weeks out, you can’t proactively manage cash. You’re always reacting, which means the decisions you make are limited—and often costly.

Relying Too Heavily on One Customer or Contract

If a large portion of your revenue is tied to one client or contract, you could be at risk. What happens if they delay payment, pause work, or end the relationship? Even if they’ve been reliable, concentration risk can disrupt cash flow overnight.

Diversifying your customer base and payment terms helps reduce this risk. The goal is to build predictability and resilience into your cash flow—not dependence on a single stream.

Turning Awareness Into Action

Recognizing cash flow problems is only the beginning. The next step is building habits and systems that prevent them from recurring. That means creating a forecasting routine, tightening your billing and collections process, aligning expenses with actual revenue timing, and reviewing key cash metrics weekly—not just when things feel tight.

Cash flow isn’t just a financial issue—it’s a leadership one. When you manage it proactively, you build confidence across your team, create room for opportunity, and reduce your personal stress as a founder. It’s one of the most powerful shifts a business can make—from reacting to leading.

Final Word: Know the Signs, Build the System

Cash flow problems don’t always start as crises. They start as patterns—slight delays, recurring shortfalls, or decisions made without complete data. But the businesses that spot the signs early and install smart systems are the ones that stay strong.

At Coltivar, we help founders build cash flow strategies that look ahead—not just react. Because when you understand where the pressure points are, you can make smarter decisions that keep your business financially healthy.

Need help solving a cash flow issue—or preventing the next one?
Book a Strategy Review and we’ll help you build a clear, cash-positive plan.