A cash shortage is most often not a critical, but still a serious problem. It can arise for a number of reasons. Usually, it is due to incorrect actions by management. Let’s highlight the main reasons for the occurrence of a cash gap:

The business definitely does not control and plan cash flows

The most important task of business owners is to regularly monitor finances and payments using various tools.

It is necessary to plan all inflows and outflows buy bulk sms service of funds in each separate period of time. For example, below is a situation where, overall, for a week, it turns out that the business is profitable, the owners were able to receive 40,000 rubles and remain in the black.

But on a specific day – Thursday – it turns out that there are more expenses than cash in the cash register. It turns out that there is a cash gap that could have been avoided simply with proper planning.

2. Accounts receivable and payment deferrals

Accounts receivable are the money that counterparties or partners owe to our business. For example, for the delivery of goods. Most often, large companies work on a deferred payment scheme. When production ships finished products or provides services today, and payment for them comes only after 30, 60 or 90 days. It will not be possible to receive money immediately.

In the reporting, the money for the sold products is what is digital marketing: a useful guide immediately taken into account as the company’s income. However, in reality, the funds in the cash register will appear a little later. This is the main difficulty, which most often acts as the cause of a cash gap.

If you work on a post-payment basis, then most of your inflows are “frozen” for a certain period of time. It seems that the company is ready to pay its debts, on “paper”, in the reporting documents there is money. But in fact, the account is empty, and the funds will arrive later.

In addition, if your customers do not meet payment singapore phone list deadlines, this can worsen the situation. This is especially critical for small and medium-sized companies, where each delayed payment obligation can significantly affect the overall financial balance. In the event of force majeure, there will be a shortage of cash in the cash register.

3. Errors in purchasing and freezing of funds in illiquid goods

Some managers buy too many materials and equipment for future use. The company will not have a deficit of internal resources, but the funds will be “frozen” in illiquid assets . And it turns out like this: the goods or raw materials are lying in the warehouse and waiting for the day of sale, and the company is faced with a shortage of funds to pay for current operations. Let’s give an example when a cash gap is formed.