Cash Flow Mistakes Small Business Owners Make (and How to Avoid Them)
Cash flow is one of the biggest challenges small business owners face—especially here in Utah, where many service-based businesses experience seasonal slowdowns, fluctuating client work, or unpredictable payment cycles.
The good news? Most cash flow problems come from a handful of habits we see over and over again. And once you understand what’s causing the issue, the fix is usually simple.
Here are the most common cash flow mistakes we see with Utah small businesses and what to do instead:
1. Depending on inconsistent income to cover consistent monthly expenses
Many business owners wait for client invoices to clear before paying:
Rent
Software subscriptions
Contractors
Utilities
This creates unnecessary stress because your bills are consistent, but your income often isn’t. When timing is unpredictable, cash flow feels chaotic.
Do this instead:
Build a one-month cash buffer.
If your monthly expenses are $4,000, aim to keep at least $4,000 untouched in your business account. This gives you:
Stability
Predictability
Peace of mind
Protection from late-paying clients
This one move alone can transform the way you feel about your finances.
2. Letting overdue invoices sit without follow-ups
It’s extremely common: you’re busy serving clients, and invoices slip through the cracks. Before you know it, thousands of dollars are sitting unpaid—not because clients are refusing to pay, but because there was no reminder.
Delayed payments = delayed cash flow.
Do this instead:
Automate or schedule invoice reminders.
A simple follow-up every 7 days can dramatically speed up payments. Most accounting tools (especially QuickBooks Online) can do this automatically, saving you time and reducing awkward conversations.
3. Making financial decisions based on your bank balance
Your bank balance doesn’t show:
Upcoming bills
Quarterly taxes
Payroll
Contractor payments
Annual subscription renewals
This is how overspending happens. Many business owners “feel” like they have cash… until the next round of expenses hits all at once.
Do this instead:
Check your monthly cash flow report before making decisions.
This gives you a true picture of how much money is actually available after future expenses are accounted for. It’s the difference between guessing and knowing.
4. Waiting until tax season to save for taxes
One of the most common (and painful) cash flow crunches we see:
Business owners wait until March or April to “come up with” tax money.
This leads to stress, payment plans, or pulling from personal savings.
Do this instead:
Set aside a percentage of every deposit.
Even 10–20% set aside consistently can make tax season completely stress-free. Your future self will thank you.
5. Mixing personal and business expenses
This makes it nearly impossible to understand your real cash position. It also slows down bookkeeping, complicates tax prep, and leads to inaccurate reporting.
Do this instead:
Use separate business and personal accounts.
This makes your cash flow clearer, cleaner, and easier to manage—not to mention much easier for your tax professional.
Cash flow problems usually have simple solutions
Cash flow issues don’t always mean you’re not earning enough. In most cases, it’s just a matter of putting better habits and systems in place.
When your cash flow is organized and predictable, you:
Stress less
Pay bills on time
Make better financial decisions
Reduce tax surprises
Protect the long-term health of your business
Small changes create huge results.
Want support getting your books—and cash flow—under control?
Clarke Financials helps Utah small business owners stay financially organized with:
Monthly bookkeeping
Cleanup and catch-up work
Accurate reporting
Cash flow tracking
Clear, simple financial guidance
If you’re ready for more clarity and less stress in your business finances, we’re here to help you confidently take the next step.
