How to Improve Cash Flow in Your Business

How to Improve Cash Flow in Your Business
Ronis Gracie
on March 15, 2020
Read in 2 min

At some point or another, every business owner needs to work on improving cash flow. The reason is simple: without proper management of cash, business operations can’t continue without problems.

Here we’ll share tips for improving cash flow that every professional business owner must know:

Pro Tip: Get cash from customers as soon as it’s viable.

First of all, prepare correct invoices – making mistakes will only delay payment as customers are likely to question them. Also, send your invoices on time because the longer you wait, the later your payment will arrive. Keep in mind, if you just can’t wait for customers to pay, you can always take out an invoice financing loan against the value of your outstanding invoices.

In addition, you may consider asking customers for a deposit up front, rather than relying on 100% payment later. This may be more appropriate for some types of businesses than others, but this is normal for a large order of any kind. And, be especially wary of new customers placing large orders, especially if you can’t verify their past payment histories and/or business reputations.

Pro Tip: Improve cash flow by paying bills as late as possible.

There’s no reason to pay the next day if you can wait a month. Of course, this is only true if there are no penalties for paying later or when you don’t get extra discounts for paying early. One way to optimize your cash flow is to pay bills on the day they’re due. Another business-savvy move is to use a business credit card where the payment is charged several days later.

Pro Tip: Avoid unnecessary fees and charges.

On the contrary, if paying late incurs charges (or forfeits discounts) then it would behoove you to pay on time. Further, credit card rates are notoriously high, so make paying off thee balances your highest priority. Take advantage of the grace period while you can, but you’ll save money by paying your balances off early.

Consider if long-term financing makes more sense for your business needs; it’s often far cheaper than revolving credit in the long run. Plus, when it comes to business telephone, internet, and other utility services you owe it to your business to shop around for the best plan. Even small savings add over time, ensuring a strong cash flow for years to come.

Pro Tip: Optimize purchases and sales = Optimize cash flow

If you have to buy something, why not buy it at a discount? One of the ways to do this is to evaluate discounts for making bulk purchases or advance payments. What’s more, there are even buying cooperatives where similar businesses get together to make large volume purchases in order to get substantial discounts.

Furthermore, don’t be afraid to let go of your old inventory at discount prices. This way you’ll get more cash for operations and investment.

Generating healthy cash flow should be applied to all areas of business. For example, you may give up a bank account not bearing interest or let go of customers who cause more trouble than they’re worth. Being a savvy business owner means involves making the tough decisions to improve cash flow and drive incremental growth.

See Business Lenders
Ronis Gracie Finance Journalist

A serial entrepreneur experienced with building several small companies from the ground up and consulting for many others, Ronis understands the finer points of small business financing. He’s passionate about small business & is committed to simplifying small business lending for others.

Important Disclosures. Please Read Carefully.

Persons facing serious financial difficulties should consider other alternatives or should seek out professional financial advice. This website is not an offer to lend. is not a lender or lending partner and does not make loan or credit decisions. connects interested persons with a lender or lending partner from its network of approved lenders and lending partners. does not control and is not responsible for the actions or inactions of any lender or lending partner, is not an agent, representative or broker of any lender or lending partner, and does not endorse any lender or lending partner. receives compensation from its lenders and lending partners, often based on a ping-tree model similar to Google AdWords where the highest available bidder is connected to the consumer. Regardless,’s service is always free to you. This service is not available in all states. If you request to connect with a lender or lending partner in a particular state where such loans are prohibited, or in a location where does not have an available lender or lending partner, you will not be connected to a lender or lending partner. You are urged to read and understand the terms of any loan offered by any lender or lending partner, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you. By submitting your information via this website, you are authorizing and/or lenders and lending partners in its network or other intermediaries to do a credit check, which may include verifying your social security number, driver license number or other identification, and a review of your creditworthiness. Credit checks are usually performed by one of the major credit bureaus such as Experian, Equifax and Trans Union, but also may include alternative credit bureaus such as Teletrack, DP Bureau or others. You also authorize to share your information and credit history with its network of approved lenders and lending partners. For qualified consumers, our lenders offer loans with an Annual Percentage Rate (APR) of 35.99% and below. For qualified consumers, the maximum APR (including the interest rates plus fees and other costs) is 35.99%. All loans are subject to the lender’s approval based on its own unique underwriting criteria. Example: Loan Amount: $4,300.00, Annual Percentage Rate: 35.99%. Number of Monthly Payments: 30. Monthly Payment Amount: $219.36. Total Amount Payable: $6,581.78 Loans include a minimum repayment plan of 12 months and a maximum repayment plan of 30 months. In some cases, you may be given the option of obtaining a loan from a tribal lender. Tribal lenders are subject to tribal and certain federal laws while being immune from state law including usury caps. If you are connected to a tribal lender, please understand that the tribal lender’s rates and fees may be higher than state-licensed lenders. Additionally, tribal lenders may require you to agree to resolve any disputes in a tribal jurisdiction. You are urged to read and understand the terms of any loan offered by any lender, whether tribal or state-licensed, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

Lender’s or Lending Partner’s Disclosure of Terms.

The lenders and lending partners you are connected to will provide documents that contain all fees and rate information pertaining to the loan being offered, including any potential fees for late-payments and the rules under which you may be allowed (if permitted by applicable law) to refinance, renew or rollover your loan. Loan fees and interest rates are determined solely by the lender or lending partner based on the lender’s or lending partner’s internal policies, underwriting criteria and applicable law. has no knowledge of or control over the loan terms offered by a lender and lending partner. You are urged to read and understand the terms of any loan offered by any lenders and lending partners and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

Late Payments Hurt Your Credit Score

Please be aware that missing a payment or making a late payment can negatively impact your credit score. To protect yourself and your credit history, make sure you only accept loan terms that you can afford to repay. If you cannot make a payment on time, you should contact your lenders and lending partners immediately and discuss how to handle late payments.