Cash crunches are visible weeks in advance, but not in the bank balance — by the time that looks wrong, the options are gone. The four signals that lead it are: days sales outstanding creeping up, which means you are financing customers more than you were; the over-60 column on the AR aging growing; a rising share of revenue concentrated in one customer's payment landing in one week; and payables being stretched, which is the business quietly borrowing from suppliers. Any one of these moving for two consecutive months is a warning. The bank balance is the last thing to tell you, not the first.
What this actually feels like
Nobody is surprised by a cash crunch in hindsight. Afterwards it is obvious — the big customer had been slipping for two months, the aging had been thickening at the back end, and payroll happened to land in the same week as the insurance renewal.
The problem is never that the signals were absent. It is that nobody was looking at them weekly, because looking at them weekly is somebody's job and in a small business it is nobody's.
What it costs to do by hand
Checking the four signals takes maybe twenty minutes a week if the books are current. The catch is the conditional — on books that are not current, the aging is wrong and the signals are noise.
The failure is rarely misreading the numbers. It is not producing them at all in the weeks that are busy, which are disproportionately the weeks the numbers are moving.
Building a 13-week cash flow forecast
The forecast is where these four signals become a specific week and a specific amount, including the downside and concentration scenarios.
Read the guide →Input, skill, output
- QuickBooks — Books, aging and commitments.
- PayPal — Incoming settlements.
- Time window — The 30-day horizon being tested.
- Look 30 days out — Cash mapped week by week.
- Spot the dips — Risk weeks flagged early.
- Show the range — Best and worst case shown.
- Risk weeks — Named, with the shortfall amount.
- Best and worst case — A range rather than a false point estimate.
- What to do — The levers available for each week.
Who this is for
- You have been surprised by a tight week before and would rather not repeat it.
- One or two customers account for a large share of your receipts.
- You pay weekly or fortnightly but get paid at 30 days or worse.
If none of those describe you, this is probably not your first priority — and the rest of the library may point somewhere more useful.
Common questions
Is the bank balance really not a signal?
It is a lagging one. By the time the balance looks wrong, the receivables that would have fixed it are already late and the levers that needed lead time have expired.
What is days sales outstanding?
Roughly how long you wait to get paid. Receivables divided by revenue for the period, times the days in it. The direction matters far more than the number.
How much notice do these signals give?
Typically four to eight weeks, which is enough to accelerate collections or arrange credit. That window is the entire value.
What if I spot one and cannot fix it?
Knowing early still helps. A credit facility arranged six weeks out is straightforward; the same conversation during the crunch is much harder and more expensive.
Is growth a cause?
Frequently. Every new job pays out before it pays in, so a business winning more work than it completes gets tighter as it succeeds. That is the most counterintuitive crunch of all.
See it on your own books, once
The First Close is one real month of your books, closed properly and configured to your chart of accounts, delivered inside two weeks. Full reconciliation against every processor, every exception flagged with the transaction behind it, and the narrative written. $497, refundable if the packet is not delivered, and it credits in full toward the first month if you continue.
Get Your First Close — $497 See a sample packet