See cash problems coming before they become crises

Pull together all your income sources for the period. This includes customer payments, interest earned, tax refunds, and any other cash hitting your accounts. Don't forget pending invoices that cleared - they count even if the work was done last month.

List every expense that left your accounts. Rent, payroll, vendor payments, subscriptions, loan repayments - all of it. Be thorough here because missed expenses throw off your whole picture. Group them by category so you can spot where the big money goes.

Subtract total outflows from total inflows. That number is your net cash flow for the period. Positive means more came in than went out. Negative means you spent more than you earned. Neither is automatically bad - just know which one you are.

Pull up last month and last year same month. How does this period compare? Look for patterns - are expenses creeping up? Is revenue seasonal? These comparisons tell you if things are getting better or worse. Trends matter more than single numbers.

Key comparisons:
- Month-over-month change (vs last month)
- Year-over-year change (vs same month last year)
- Rolling 3-month average trend
- Variance from budget or forecast

Red flags to watch: late customer payments, rising expenses without revenue growth, one-time costs that will repeat, or seasonal dips you forgot about. Write down anything that could cause trouble in the next 30-60 days. Problems you see coming are problems you can fix.

Common warning signs:
- Accounts receivable aging over 60 days
- Payables approaching due dates faster than receivables
- Negative net cash flow for 2+ consecutive periods
- Cash balance declining below 2 months of expenses
- Unplanned large expenses on the horizon

Based on what you found, what needs to change? Maybe chase overdue invoices faster, cut a subscription, or push back a big purchase. Write down 2-3 specific actions with deadlines. Cash flow management only works if you actually do something with the numbers.

Project your cash position for the next 13 weeks. Start with todays closing balance and add expected inflows (confirmed sales, recurring revenue, scheduled payments due). Then subtract expected outflows (payroll, rent, loan payments, vendor bills). Week by week, see where you might hit zero or need a cushion. This forecast is your early warning system - update it every time something material changes.