Improve Cashflow in Your Small Business

Improve Cashflow in Your Small Business

Cashflow is the lifeblood of every small business. Here are eight tried and true systems and habits to improve your business cashflow.

When cash is flowing smoothly, bills get paid, growth becomes possible, and plans can be explored. But when cashflow tightens, even in a profitable business stress levels rise, suppliers start calling, and plans get put on hold.

If you're noticing slow cashflow, inconsistent revenue, or difficulty covering expenses, you’re not alone. Many small businesses experience cashflow challenges at some point, especially during seasonal dips, rising costs, or delayed customer payments. The good news? With the right habits and systems, improving and managing cashflow is achievable. Here are eight foundation ways to take control.

1. Know Your Numbers with a Cashflow Forecast

You can’t fix what you can’t see. A simple cashflow forecast showing expected money coming in and going out helps you anticipate issues before they hit.

A good forecast should:

  • Project the next 3, 6, and 12 months
  • Include expected sales, expenses, wages, tax, and seasonal trends
  • Flag months where cash may dip below comfortable levels

This gives you time to plan, adjust spending, chase invoices, increasing marketing activity in slow periods. Many small business owners run blind. A forecast changes everything. 

2. Speed Up Payment Times

Slow-paying customers are one of the biggest causes of cashflow stress. To get paid faster:

Send invoices immediately
Don’t wait until the end of the week. The sooner the invoice goes out, the sooner money hits your account.

Add payment links
Use Square, Stripe, PayPal, Apple Pay, or direct debit. People pay faster when it’s easy.

Introduce 7-day terms (or shorter)
30-day accounts create cashflow issues. Many industries now use 7–14 days.

Automate reminders
Most accounting software like Xero or MYOB can send automatic payment reminders. This removes awkwardness and speeds up cash coming in.

Even shaving a few days off payment time can add thousands to your bank account each year.

3. Review Expenses Regularly

You don’t need to cut your business to the bone—but you should eliminate waste. Small recurring expenses are cashflow killers.

Review your costs every quarter and look for:

  • Subscriptions you no longer need
  • Insurance premiums that can be reduced
  • Supplier contracts that can be renegotiated
  • Software tools that double up
  • Review utility prices when contracts are up

A simple audit can free up hundreds, or even thousands each month.

4. Improve Your Pricing Strategy

If it’s been more than 12 months since your last price review, you’re almost certainly undercharging. Costs have risen, wages have risen, and suppliers have increased prices, yet many small businesses don’t adjust their pricing accordingly.

A healthy pricing strategy should:

  • Cover your time
  • Cover the real cost of delivering your service
  • Include a profitability buffer
  • Consider what competitors are charging

Even a 5–10% pricing adjustment can drastically improve cashflow without hurting customer demand. Structure and bundle deals to upsell so your average price increases.

5. Offer Upfront or Subscription-Based Payments

Cashflow improves when payments come before or as work is completed.

Consider offering:

  • Deposits before starting a job
  • Progress payments on longer projects
  • Prepaid service bundles (e.g., 10 sessions, monthly plans)
  • Subscription models (e.g., ongoing support packages)

This creates a more predictable, stable cashflow cycle.

6. Keep Your Business and Personal Finances Separate

Mixing accounts is a hidden cashflow killer. When the owner dips into business cash, or pays for personal expenses, it becomes impossible to know what money is truly available.

Set up:

  • A dedicated business bank account
  • A separate tax savings account
  • A regular owner’s wage or drawings amount

This helps maintain discipline and shows the true financial health of your business.

7. Plan for Tax (So It Never Surprises You)

Many small businesses experience cashflow crises not because they’re unprofitable—but because tax bills catch them off guard.

Set aside money for:

  • BAS
  • PAYG instalments
  • Super
  • Income tax

A good rule of thumb is setting aside 20–30% of every dollar earned. Automate it to reduce stress.

8. Get Professional Guidance Early

Cashflow problems don’t fix themselves. A good accountant can help you:

  • Understand your numbers
  • Set up forecasting tools
  • Identify where money is leaking
  • Improve invoicing systems
  • Reduce tax and unnecessary costs

Often, a few small adjustments can transform your cashflow outlook within weeks.

Improving cashflow doesn’t require complex strategies. It comes down to visibility, consistency, and smart financial habits. By tightening up invoicing, reviewing expenses, adjusting pricing, planning for tax, and forecasting properly, you'll build a stronger, smoother, more resilient business.

If you want help improving your small business cashflow contact us at Cashflow Financial to discuss customised advice, forecasting tools, and ongoing support.