5 Financial Red Flags You Can Spot Before They Cost You
You don’t need to be an accountant to catch financial trouble before it snowballs.
All it takes is knowing what to look for — and taking five minutes a week to check for warning signs.
Because by the time your bookkeeper or CPA spots the problem, it’s often too late. These five red flags show up early, quietly, and consistently — and learning to recognize them now can save you thousands later.
🚩 1. Your Profit & Loss Statement Doesn’t Match Your Bank Balance
If your P&L shows a profit, but your bank account feels empty, something’s off.
That gap usually means unreconciled transactions, missing expenses, or client payments that were never recorded.
✅ Fix it fast: Reconcile your bank account in QuickBooks Online. The balance in QBO should match your actual bank balance. If it doesn’t, find out why — today.
🚩 2. You’re Carrying Unpaid Invoices Over 30 Days
Accounts receivable (A/R) is a silent killer for small businesses.
When clients take too long to pay, your cash flow dries up — even if your revenue looks healthy on paper.
✅ Fix it fast: Run your A/R Aging Report in QBO. Follow up on every client who owes you money over 30 days. Automate payment reminders or add late fees if needed.
🚩 3. You Have “Uncategorized” Transactions Lurking in QuickBooks
If you see “Uncategorized Expense” or “Uncategorized Income” in your books, it’s like leaving receipts in a shoebox.
Not only does it throw off your reports, but it also messes with your tax deductions.
✅ Fix it fast: Go to your Chart of Accounts and search for anything labeled “uncategorized.” Reassign each transaction to the proper account.
🚩 4. Vendor Payments Aren’t Consistent with Past Months
If your vendor or contractor payments suddenly spike or drop, it’s worth a closer look.
This can signal duplicate payments, missing invoices, or — worst case — fraudulent activity.
✅ Fix it fast: Compare your Expense by Vendor Summary for the last three months. Look for unusual patterns and confirm every large payment.
🚩 5. You Don’t Have a Cash Cushion
A healthy business has a reserve — even a small one.
If one slow month or unexpected bill would derail you, that’s not flexibility, that’s fragility.
✅ Fix it fast: Open a savings or reserve account. Set up an automated transfer of 1–2% of your revenue each week. Build the habit before you need the safety net.
💡 The Big Picture
Catching these red flags early is like routine maintenance for your car — it prevents breakdowns before they happen.
And when you take five minutes each week to review your financial dashboard, you’re not just looking at numbers — you’re looking at the health of your business.
👉 Micro Win: Run your A/R Aging Report in QuickBooks Online right now.
If you see anyone past 30 days, send one reminder before the end of the day.
