Most business owners don’t realise they have a cash flow problem until it becomes urgent.
Revenue might be growing, and sales might be strong, but cash flow pressure can still build quietly in the background. A simple stress test can reveal potential risks before they turn into a problem.
If you run a business, these five questions can provide a quick snapshot of how resilient your cash flow really is.
1. If sales stopped tomorrow, how many weeks could you operate?
This question highlights how much financial buffer your business has. Businesses that rely entirely on incoming revenue week to week are far more exposed to unexpected disruption.
2. How many days does it take customers to pay you — and is that number increasing?
Slow payments are one of the most common causes of cash flow pressure. If debtor days are increasing, it may indicate tightening conditions for your customers or gaps in your collection processes.
3. Are you using withheld tax or super to support cash flow?
Using obligations like PAYG withholding or superannuation to temporarily support cash flow is often a sign that financial pressure is building behind the scenes.
4. Have your supplier terms shortened in the last 6–12 months?
If suppliers are reducing credit terms or requesting earlier payment, it may signal that they perceive higher risk or that your payment patterns have changed.
5.Do you know exactly where last quarter’s profit went?
Many businesses report profit but struggle to see it reflected in their bank balance. Understanding where profit is absorbed (such as stock, debt repayments, or tax obligations) is key to maintaining control.
What Your Answers Reveal
This exercise is about visibility.
If any of these questions are difficult to answer confidently, it may be an indication that your cash flow systems and reporting need some strengthening. Because the earlier you identify potential pressure points, the easier it is to address them before they impact the business.
If you’d like help reviewing your cash flow position, we’re here to help.
