Why does cash flow vary, and what can I do in case of a cash crisis?

2.5.2025

A company’s cash flow can become unstable for many reasons. Common causes include seasonal sales patterns, long customer payment terms, and excessive inventory.

Seasonal fluctuations, long payment terms, or large inventories tie up cash
Business growth and times of change tie up capital
Lack of monitoring and forecasting worsens the situation
Pay later, invoice earlier
Talk to financiers in good time

A company’s cash flow can become unstable for many reasons. Common causes include seasonal sales patterns, long customer payment terms, and excessive inventory. If there’s no money in the bank despite having sales, these could be the underlying issues.

Solutions may include extending your own payment terms and shortening customer payment terms, requesting advance payments, and actively monitoring cash flow. Financial options include using a credit line or negotiating a short-term loan. Another option is invoice factoring (selling invoices), which accelerates cash inflow. It’s also important to contact financiers and tax authorities early on.

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