Reverse Negative Cash Position – Another Planning Opportunity.


As a business owner, you know firsthand how many obstacles you can face on the road to success. Ups and downs are inevitable. Negative cash flow is among the challenges your growing small business may face.

Negative cash flow occurs when a business spends more than it received within a given period. Often, it reveals temporarily mismatched expenditures and revenues. In essence, dealing with negative cash flow is almost unavoidable.


Counteract your negative cash flow.


Your cash flow projections can tell you precisely what is happening—so you can prepare accordingly. To make sure your cash flow forecast is as accurate as possible:

• Analyze your business indicators,
• Estimate your sales in three-month intervals,
• Understand your budget,
• Be a diligent collector, and
• Maintain and update your forecast weekly.


Here are a few ways to help turn around your negative cash flow:


  • Look at your financial statements.


  • Do you review your financials monthly?
  • Is there a cash flow statement included in your monthly financial reports?
  • Are you utilizing a rolling three-month cash flow forecast?
  • Do you update your three-month cash flow forecast weekly?
  • Have you determined the cause of your negative cash flow?
  • Do you have a strategy and process to monitor your current situation?
  • Are you predicting what your cash position will be for the next three months?



  • Analyze your spending.



  • What can you cut out for the next ninety days without adverse impact?
  • Are there planned spending items that could be delayed for three months?
  • Do you have more than one month of inventory on hand?
  • Are your sales and inventory correlated?
  • What can be re-negotiated to reduce expenditures for the next three months?
  • Do you know which bills might charge interest or fees if not paid on time?



  • Increase your revenues.



  • How can your sales improve revenues in the next six months?
  • What channels would be appropriate for marketing your products/services that you are not using currently?
  • What type of “loyalty” program is in place to encourage more buying?
  • Are you using your major clients as “influencers” to expand your sales?
  • What popular products/services could you promote with a “special” campaign?
  • Are you able to sell excess inventory or equipment at a reduced price without hindering your business?
  • Have you analyzed your prices to see if you can raise them without hurting your sales?



  • Arrange to get paid faster.



  • Are you offering discounts for early payments?
  • Do you give discounts on large orders?
  • What follow-up is being done to collect from over sixty-days outstanding invoices?
  • Have you shortened your payment terms?
  • For large orders, are you accepting installment payments?
  • For large orders from new customers, have you asked for deposits?
  • Are “late payment” fees added to invoices when customers pay late?



  • Manage using your budget.



  • Do you know how much money you will have in sales for the next ninety days?
  • What are your recurring expenses each month?
  • Have you calculated the gross profit for each product/service being sold in the next three months?
  • Have you offered employees rewards for their cost-savings suggestions?



  • Apply for or ask for your additional financing.



  • Do you have an existing line of credit, unsecured loan, or credit card?
  • Are you relying on your credit cards to maintain positive cash flow?
  • Have you sought short-term fixes to solve your three-month issues?
  • Are you able to reach out to venture capitalists, angel investors, or private investors for funding?
  • Is refinancing an option?



  • Maintain your cushion.


  • Do you have a formula for calculating a reserve to be held in a separate account?
  • Is a cash reserve being built to “cushion” your business for when the unexpected occurs?
  • Is the one month of operating expenses for your reserve?




Negative cash flow is a joint facet of business growth and development, no matter your company’s size or scale. To make sure your cash flow forecast is as accurate as possible:


• Analyze your business indicators,
• Estimate your sales bookings in three-month intervals,
• Understand your budget,
• Be a diligent collector, and
• Maintain and update your cash flow forecast.


Be quick to recognize and remedy your cash flow imbalance. Negative cash flow is nothing to worry about, and it happens to every business.
Use our questions to create your pathway toward success.


Plan! Adapt! Manage! Succeed!


→   #accucompvirtual CFO Team is accountable for delivering timely and accurate financial information.

#accucomp – Virtual CFO services: Our business is your success.

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