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Confirm the dates and amounts
Start with available bank balances and a dated list of expected receipts and payments. Separate committed amounts from estimates. Include tax, debt payments and owner withdrawals as well as routine operating costs.
A monthly total can conceal a shortage early in the month. Examine the weeks around the lowest point, and check whether customer payment dates are realistic rather than simply copying invoice dates.
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Separate timing from trading performance
If profitable work is being paid late, debtor follow-up, billing stages or payment terms may matter. If every sale contributes too little after its costs, bringing receipts forward will not fix the underlying economics. A large equipment purchase creates another kind of cash movement.
Use our working capital review to examine cash tied up in receivables, stock and supplier timing.
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Compare actions and consequences
List possible actions beside their cash effect, timing and commercial consequences. Following up overdue invoices is different from discounting them. Delaying a purchase is different from failing to meet a payment obligation. Discuss changes with the people affected.
Financing may form part of the response, but test repayment capacity and the reason for the shortfall. Our finance preparation guide helps organise a lender discussion.
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Monitor the next pressure point
Update the forecast as payments and receipts become known. Keep a base case and a downside case so you can see what happens if a large customer pays later than expected. Use the 12-month forecast template for the wider view.
If the business may be unable to pay obligations when due, seek timely professional advice on the circumstances. A spreadsheet is useful evidence, but it is not a substitute for that discussion.
Use this in your business
A shortfall diagnostic
| Possible cause | Evidence to check | First discussion |
|---|---|---|
| Late receipts | Debtor ageing and promised payment dates. | Billing and collection actions. |
| Low contribution | Margins by product, job or customer. | Price, costs and work mix. |
| Stock build-up | Stock age and expected sales. | Purchasing and stock release. |
| One-off spending | Investment dates and funding plan. | Timing and appropriate finance. |
| Recurring gap | Forecasts reconciled to actual cash. | Business model and obligations. |
A practical example
Profitable work, delayed payment
A hypothetical project business pays staff and suppliers before a customer settles the final invoice. The first task is to map that timing gap and test collection assumptions. If the same gap repeats on every project, review billing stages and working-capital needs rather than treating each occurrence as an isolated surprise.
Your next move
Bring the cash gap into a clear decision
Bring the cash forecast and the payments causing concern. We can help distinguish an immediate timing issue from a wider performance decision.
Bring the cash gap into a clear decision