How do I improve cash flow in a small business?

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Expert Bookkeeping Services · Accepted Answer

Invoice immediately, shorten payment terms, take card or direct-debit payments, chase overdue invoices weekly, negotiate longer supplier terms and keep a rolling 13-week cash-flow forecast. Separate timing from profitability A profitable business can run short of cash when customers pay late, inventory builds up or loan repayments fall due. Review the gap between invoicing and collection, stock purchases and supplier payments. Identify whether the pressure is temporary timing, low margins or a recurring loss before deciding how to respond. Maintain a rolling forecast Build a week-by-week forecast from the opening bank balance, realistic collections and known outgoings. Include wages, taxes, borrowing and owner withdrawals. Compare forecast with actual results each week and test a delayed-payment scenario. Use it to prioritise collections and discuss finance early, rather than waiting for a missed payment.

How do I improve cash flow in a small business?

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Detailed answer

Separate timing from profitability

Maintain a rolling forecast

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