By Louis du Plessis
CEO Pollen Finance | Sep 21, 2026 | 7 min read
Five common cash flow mistakes are:
A profitable business can still run into cash flow trouble if money leaves the business faster than it comes in.
Good cash flow management means understanding not only how much money the business makes, but when that money actually becomes available.
Growth is supposed to be good for cash flow. It usually means more customers, more orders, more revenue, and more money. Except that’s not always how it works.
I’ve seen businesses grow quickly and become more cash-strapped at exactly the same time. It’s one of the strange realities of running a business. Growth costs money before it makes money.
That’s why some of the biggest cash flow mistakes happen when a business is doing well. Here are five I see regularly.
This is probably the most common one. You land a R500,000 order. Fantastic. But that doesn’t mean you have R500,000. You may need to purchase materials, cover salaries, invoice the customer, and then wait 30, 60 or even 90 days for payment.
On paper, revenue has increased. In the bank account, the opposite may have happened.
Revenue tells you what the business has sold. Cash flow tells you whether the business can meet its obligations today. A growing order book can look impressive while the bank balance gets smaller.
That’s why I think business owners should celebrate the sale. Then immediately ask: When does the cash actually arrive?
Build cash flow forecasts around actual payment dates rather than invoice dates. Know when customers are likely to pay, salaries are due, and debt repayments leave the account.
Growth becomes much easier to manage when you can see the timing.
This sounds contradictory. How can more business create less cash? Quite easily.
Imagine a manufacturer normally produces 1,000 units a month. Demand suddenly increases to 2,000. That’s great. But now the business may need twice the raw materials, more packaging, and possibly more equipment.
Those costs happen before the additional customer revenue arrives. The business has grown. Its working capital requirement has grown with it.
Every additional sale can require capital. This is especially true in businesses that hold inventory, offer customers payment terms, or experience seasonal demand.
The faster the business grows, the larger the gap can become.
Before pursuing a major growth opportunity, calculate what it will do to working capital. Ask what needs to be paid upfront, how much additional stock will we need, and what happens if payment arrives late?
This is also why 7 Signs Your Business Is Ready to Scale isn’t only about demand. The financial capacity to support growth matters just as much.
A sale isn’t finished when the invoice goes out. It’s finished when the money arrives. Yet debtor collection is often treated as an administrative task rather than a cash flow priority.
Oftentimes invoices go out late, follow-ups happen inconsistently, or payment terms aren’t enforced. One overdue invoice doesn’t always seem serious, but 20 of them are.
Your customers’ payment habits directly affect your ability to pay suppliers, purchase stock, or take on new work. Essentially, you can end up financing your customers’ businesses with your own cash.
Make payment discipline part of the operation. That means invoice immediately, track overdue accounts, and resolve invoice disputes quickly.
You don’t need to become aggressive about collections, just consistent.
Stock feels like an asset, and technically, it is. But stock sitting in a storeroom is also cash you can’t use.
Retailers know this particularly well. A product might eventually sell, but while it sits on the shelf, the business has already paid for it. Meanwhile rent is due and suppliers need to be paid.
Too much inventory can quietly drain working capital. And the problem gets worse if that inventory becomes outdated, seasonal, or discounted. Suddenly R100,000 worth of stock doesn’t necessarily mean R100,000 worth of recoverable cash.
Understand which products actually move. Track stock turnover, slow-moving products, and seasonal demand. Buy based on evidence rather than optimism.
For retailers in particular, we’ve explored this further in Financing Inventory Without Hurting Cash Flow.
This is the mistake that tends to make all the others worse. Businesses often start thinking seriously about cash flow when the bank balance becomes uncomfortable. By then, options are limited.
Urgency rarely improves financial decision-making. It forces businesses to solve today’s problem rather than plan for tomorrow’s opportunity. Strong businesses don’t only ask, “How much cash do we have?” They ask, “What will our cash position look like in 30, 60 and 90 days?”
Build a simple rolling cash flow forecast. It doesn’t need to be complicated.
Track expected:
Money in
Money out
Then update it regularly. The purpose is to see problems early enough to do something about them.
This is one of the most important things to understand about cash flow. Profit and cash are not the same thing. A business can record a profit while its money is sitting in unpaid invoices, invested in equipment, or being used to fund growth.
Profit measures whether the business creates more value than it consumes over a period. Cash flow measures whether money is available when the business needs it. A healthy business needs both.
There isn’t one perfect number. Different businesses have different cash cycles. But healthy cash flow usually means the business understands what money is coming in, what money needs to go out, and how much cash should remain available.
It’s important to remember that a good cash flow plan doesn’t only work when everything goes right.
Sometimes the business is managing cash well and still faces a timing gap. Common examples include large customer orders arriving or supplier opportunities appearing. That’s different from using funding to repeatedly cover an underlying cash flow problem.
Working capital can be useful when it bridges a clear gap connected to a real business opportunity. It is much less useful when the business doesn’t understand why cash keeps running out.
Funding shouldn’t replace cash flow management. Good cash flow management helps you understand when funding actually makes sense.
If you’re growing quickly, ask yourself:
If any of those answers are “I’m not sure”, that’s probably the place to start.
Cash flow isn’t the exciting part of entrepreneurship. Nobody starts a business because they’re passionate about debtor days, but cash flow gives a business options.
Perhaps most importantly, it gives you the option not to panic when something goes wrong. That’s why I don’t think cash flow management is simply a finance function, but rather a growth function.
Growing a business is about making sure the business has enough cash to keep moving while that growth happens. And sometimes the difference between a great opportunity and a cash flow problem is simply understanding the timing.
About the author
Louis du Plessis is the CEO of Pollen Finance, helping established South African businesses access funding to seize growth opportunities. He writes about business funding, cash flow and entrepreneurship, drawing on over a decade of experience working alongside SMEs.
