Small Logistics Company Cash Flow Case
Business context
A small local logistics company with three vans serving regular business clients. Invoices are usually paid 30–45 days after delivery.
The numbers below are simplified fictional examples used for educational purposes.
The numbers
| Monthly client revenue (invoiced) | $22,000 |
| Cash actually received this month | $16,000 |
| Fuel costs | $3,800 |
| Driver / labor costs | $8,500 |
| Vehicle lease and maintenance | $3,200 |
| Other operating costs | $1,500 |
| Opening cash balance | $4,000 |
Step-by-step calculation
Cash in (this month) = $16,000
Cash out = $3,800 + $8,500 + $3,200 + $1,500 = $17,000
Net cash flow = $16,000 − $17,000 = −$1,000
Closing cash balance = $4,000 + (−$1,000) = $3,000
| Net cash flow | −$1,000 |
| Closing cash balance | $3,000 |
What this means
On invoiced revenue ($22,000) the business looks profitable: $22,000 − $17,000 = $5,000 of profit. But only $16,000 actually arrived in the bank account this month, so the bank balance is shrinking. This is a classic example of a profitable business with a cash flow problem.
Want to check your own numbers?
Use the related calculator or contact SME Finance Helper if you want help interpreting a similar small business case.
Cash flow risk
Drivers, fuel, and lease payments must be paid on time, but customers pay weeks later. If one or two big clients delay further, the cash balance can drop to zero quickly — even though the business is profitable on paper. Logistics companies often need a cash buffer of at least 1–2 months of fixed costs.
What to monitor
- Average days from invoice to payment, per client.
- Closing cash balance at the end of each week.
- Fuel cost per delivery (sensitive to fuel prices).
- Concentration risk: how much revenue comes from the top 1–2 clients.
Related calculators and guides
Need help interpreting your own numbers?
If you have a small business case and want a more tailored educational explanation, you can contact SME Finance Helper.
This case study is for educational and planning purposes only. It is not accounting, tax, legal, investment, or financial advice. Numbers shown are simplified fictional examples.