5 Warning Signs Your Business Is Running Out of Cash

The Silent Killer

Cash flow problems don't announce themselves with a siren. They creep in quietly, often disguised as 'temporary' issues. By the time most business owners realize they're in trouble, it's often too late to make easy fixes.

Here are the five warning signs that your business is running out of cash—and what to do about each one.

1. You're Paying Bills Late (Or Just in Time)

If you find yourself waiting until the last possible day to pay vendors, or worse, paying bills late, this is a red flag. It means you're timing your payments based on when money arrives, not when bills are due.

What to do: Review your accounts payable aging report. If you're consistently paying 30+ days late, you have a cash flow problem, not a vendor relationship problem.

2. You Can't Cover Payroll Without a 'Good Week'

If payroll depends on a specific invoice being paid or a big sale coming through, you're operating on borrowed time. Payroll should be covered by your cash reserves, not by hope.

What to do: Build a payroll reserve equal to at least one pay period. If you can't do that, you need to either increase revenue, decrease expenses, or secure a line of credit.

3. You're Using Credit Cards for Operating Expenses

Using credit cards to cover regular operating expenses (rent, utilities, supplies) is a sign that your cash flow isn't sustainable. Credit cards should be for emergencies or strategic investments, not day-to-day operations.

What to do: If you're carrying a balance month-to-month for operating expenses, you need to either increase prices, reduce costs, or secure proper financing.

4. Your Accounts Receivable Is Growing Faster Than Revenue

If customers are taking longer to pay, or you're extending payment terms to close deals, your cash flow is suffering even if your revenue looks good on paper. Money you're owed isn't money you have.

What to do: Implement stricter payment terms, offer early payment discounts, and follow up on overdue invoices immediately. Consider requiring deposits or progress payments for larger projects.

5. You're Avoiding Looking at Your Bank Balance

This might sound psychological, but it's very real. If you find yourself dreading checking your bank account or putting off financial reviews, it's often because you know the news isn't good.

What to do: Face the numbers. Set up weekly cash flow reviews. The sooner you know where you stand, the more options you have. Ignorance doesn't make the problem go away—it makes it worse.

The Bottom Line

One of these signs alone might be manageable. Two or more means you need to take immediate action. The good news? Most cash flow problems are solvable if caught early enough. The key is recognizing the warning signs and acting on them before they become crises.