BizSugar.com › Finance › How to Avoid Cash Flow Problems by Covering Production Costs Upfront

Worried about covering production costs? Read on.

Cash flow problems can occur for a myriad of reasons. Late-paying customers, a blip in sales, too much cash shored up in inventory, and so on. The problem with cash flow is that unless you’re paying attention to every aspect of your business, it can quickly creep up on you, even if your profits on paper look good.

If you’re a manufacturing company or produce a product, this can also happen when you incur upfront costs to support production—particularly if the market is volatile and you experience an unexpected surge in demand and don’t have the cash flow to cover the costs.