Will I have cash flow problems soon?
Cash flow problems rarely announce themselves. They build quietly over weeks, then hit all at once. Here's how to see them coming before they arrive.
The short answer
Will you run into cash flow problems?You need to compare your projected cash inflows against your committed outflows for the next 30, 60, and 90 days. If outflows exceed inflows in any window, you have a cash gap forming. Below, we'll show you how to spot it in your accounting software.
Cash flow problems start weeks before you feel them
Your bank balance looks fine today. $52,000 sitting in the account. But here is what is coming in the next 45 days: payroll ($34,000), quarterly tax estimate ($8,200), that equipment lease payment ($2,400), rent ($4,800), and a vendor invoice you already approved ($6,100). That is $55,500 going out.
Meanwhile, your biggest client is 22 days late on a $18,000 invoice. Two smaller clients haven't been invoiced yet because you have been too busy to send the paperwork. The cash that is supposed to cover those obligations is not confirmed.
This is how cash flow problems work. Not a sudden disaster, but a slow squeeze where outflows are locked in and inflows are uncertain. By the time you notice, the gap is already here.
Four early warning signs of a cash flow crunch
You do not need sophisticated forecasting software to spot trouble early. These four signals show up in your accounting data weeks before the problem becomes urgent:
- Receivables are aging. If your average days to collect is climbing (from 28 days to 38 days to 45 days), cash is arriving later but your bills are not moving later with it.
- Expenses are growing faster than revenue. Your revenue grew 8% this quarter but expenses grew 14%. The gap is narrowing and the buffer is getting thinner each month.
- Seasonal dips are approaching. If your slowest months are coming and you have not built a cash reserve, you are heading into thin ice with no margin for error.
- Large commitments are stacking up. Tax payments, insurance renewals, equipment purchases, and new hires all tend to cluster. If three or four big outflows hit the same month, even a healthy business can get squeezed.
How to check for cash flow problems in QuickBooks Online
QuickBooks does not have a single “will I run out of cash” report. You need to pull data from four places and compare them.
- 1Get your current cash position
Go to Reports, search for “Balance Sheet,” run it as of today. Note “Total Bank Accounts” under Current Assets. This is your starting point.
- 2Check your receivables pipeline
Go to Reports→ “A/R Aging Summary.” Look at how much is current vs. overdue. Money in the “61-90 days” and “91+ days” columns is at risk of never arriving.
- 3Total your upcoming obligations
Go to Reports→ “A/P Aging Summary” for bills due. Then check Gear icon → Recurring Transactions for payroll, rent, and subscriptions. Add them together for the next 30 and 60 days.
- 4Run the Statement of Cash Flows
In Reports, search for “Statement of Cash Flows” and run it for the last 3 months. Look at whether net cash from operations is positive or negative each month and whether it is trending down.
- 5Do the math
Current cash + realistic receivables (exclude anything 60+ days overdue) minus committed outflows for the next 30 days. If the result is under two weeks of operating expenses, you are in the danger zone.
Total time: about 25 minutes. Four reports, one manual calculation, and you need to repeat this at least every two weeks to stay ahead of the problem.
How to check for cash flow problems in Xero
Xero's built-in short-term cash flow tool gives you a head start, but it only sees invoices and bills already in the system.
- 1Open the short-term cash flow projection
Go to Business → Short-term cash flow. Set the projection to 30 days, then 60, then 90. Look at whether the projected balance dips below zero at any point.
- 2Check the Aged Receivables report
Go to Accounting → Reports→Aged Receivables. Look at the 30+ and 60+ day columns. These are receivables Xero's cash flow tool counts as incoming, but they may not arrive on time.
- 3Add missing expenses to the projection
If payroll, quarterly taxes, or other recurring costs are not entered as bills, Xero's projection will miss them. Use the “Add adjustment” feature to include them.
- 4Stress-test the forecast
Adjust the expected payment dates for your slowest-paying clients. If the forecast goes negative when two clients pay late, you have a cash flow problem forming.
Total time: about 20 minutes. Xero gives you a better starting point than QuickBooks, but you still need to fill in the gaps and stress-test assumptions manually.
Why monthly monitoring is not enough for cash flow
Unlike profitability or margins, cash flow changes week to week. A monthly check tells you where you were. A weekly check tells you where you are headed. Here is the reality of staying on top of this manually:
- You need to check every 1-2 weeks. Cash positions change fast. A monthly forecast is stale by week two.
- Your books need to be current. If transactions are not categorized or invoices are not entered, your forecast will be wrong. Garbage in, garbage out.
- You need to think about what is not in the system yet. Upcoming tax payments, insurance renewals, and equipment repairs are not in your accounting software until someone enters them.
Or get automatic cash flow early warnings every month
Bottomline connects to your QuickBooks or Xero account and builds a rolling cash flow forecast automatically. It flags potential cash gaps before they become emergencies:
Bottomline does not just add up numbers. It looks at your clients' actual payment history to predict when they will really pay, factors in recurring expenses that are not yet entered as bills, and stress-tests the forecast against late-payment scenarios. You get a realistic picture, not an optimistic one.