What are the factors that causes cash shortages?

Cash shortages can be caused by several factors, including poor cash flow management, unexpected expenses, and seasonal fluctuations in revenue. Businesses may also struggle with slow accounts receivable collections, leading to delays in cash inflow. Additionally, inadequate financial forecasting and overspending can exacerbate cash shortages, making it difficult to meet operational needs. Economic downturns can further strain cash reserves, impacting liquidity.