The top eight reasons individuals and companies experience cash flow problems

14 June 2014

Here at 4Squared, when working with our clients we regularly witness the most common reasons that individuals and companies experience cash flow problems. Here are our top eight reasons, so you can plan ahead and make sure you don’t fall into these common pitfalls.

1 - The business is under capitalised, without sufficient working capital. This could be an historic problem, or one caused by growth or over trading.

2 - Over stocking or obsolete stock.

3 - Over financing or over investment.

4 - Pressure on sales and margins due to market conditions or competition.

5 - Income & expenditure balance is negative.

6 - Banks reducing or withdrawing facilities, or demanding more security.

7 - Credit insurance on your business has been withdrawn and your suppliers are insisting on pro-forma payments.

8 - Aggressive creditors (suppliers, banks, and revenue) are demanding payment. Legal action has started – such as CCJs, Statutory Demands.

We’re here to help. Act now and get professional advice for free from 4Squared.

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