1. Forecast your cash needs
Plan ahead 3–12 months. Compare expected revenue to payroll, rent, taxes, and inventory needs. Early forecasting helps prevent shortfalls.
2. Monitor cash flow regularly
Review cash flow statements monthly. Track all inflows and outflows. Use accounting tools to automate reporting.
3. Maintain a cash reserve
Aim for at least three months of operating expenses.
4. Implement a collections policy
Send reminders ahead of due dates, follow up on late invoices, and clearly define payment terms.
5. Offer early-payment incentives
Discounts for early payment can accelerate cash inflows.
6. Optimize inventory management
Reduce excess stock and align purchasing with actual demand.
7. Leverage technology
Automate invoicing, provide easy payment links, and send invoices immediately when work is completed.
8. Review expenses and renegotiate terms
Audit recurring costs, cancel unused services, and renegotiate vendor terms.
Strong cash flow management allows businesses to operate with confidence.
