8 Cash Flow Moves Every Business Should Make

Cash flow isn't something you forecast once and revisit at month-end. It needs to be worked on every week, refreshed against what actually happened and constantly adjusted for what comes next. Most cash flow problems could be avoided. By the time a founder or CEO is asking, "Why don't we have more cash?", the decisions that caused the problem were usually made three to six months earlier - a hiring plan, a stock order, a payment-terms concession to a large customer or an investment made when the outlook looked very different.

Improving cash flow starts with visibility. You need to know what cash is expected in, what needs to go out and what that means for the weeks ahead. For most businesses, a rolling 13-week cash flow forecast provides enough visibility to identify problems while there is still time to do something about them. The businesses that manage cash well aren't necessarily the ones with the biggest reserves. They're the ones that can see thirteen weeks ahead with enough confidence to make a decision today, rather than reacting to whatever the bank balance says on a Friday afternoon.

Here are eight moves we make with clients before the end of every quarter, when the pressure of the previous six months is about to compound whatever slack already exists in the system.

1. Refresh your 13-week cash flow forecast

Rebuild or refresh the 13-week rolling cash forecast from actuals, not the annual budget or forecast. Budgets and forecasts go stale within weeks of being written. A cash forecast refreshed every Friday against what actually happened gives you a current view of what's coming and something you can genuinely make decisions from.

2. Collect faster, and don't pay earlier than you need to

One of the simplest ways to improve cash is often sitting inside the business already. If customers are taking 60 days to pay you while you're paying suppliers in 20, you're effectively financing both sides. Strong AP and AR leads are critical here. Collections, payment runs and agreed terms need to be actively managed rather than simply processed.

3. Review debtors customer by customer

Don't just look at debtor days in aggregate. An average figure can hide the two or three customers quietly funding themselves at your expense. Understand who owes you money, how long they are actually taking to pay and where you need to act. A large overdue balance should have an owner and an action, not just appear on an aged-debtors report.

4. Renegotiate supplier payment terms before you need to

Start with your five largest suppliers. Suppliers are far more willing to extend terms to a customer who isn't yet late than to one who is. Have the conversation while you still have options, and then make sure the agreed terms are actually being used.

5. Stop turning unnecessary inventory into cash sitting on the floor

Sequence inventory orders against the forecast, not against habit. Surplus inventory is effectively cash taken out of your bank account and put on the floor of your facility. Not understanding inventory turns, actual demand or your true stock position is one of the most common silent drains on cash.

6. Time capital expenditure around cash

Time capital expenditure against your confirmed cash position, not the calendar year. A "we always buy new equipment in Q3" habit can collide badly with a slow quarter. The right investment at the wrong time can still create a cash problem.

7. Know your funding headroom before you need it

A conversation with your bank is very different before a cash crunch than during one. Know what facilities you have available, how much headroom remains and what additional funding could be accessed well before you need it.

8. Stress-test your cash forecast

Don't only model what you think will happen. Understand what happens to cash if sales are slower, customers pay later or costs increase, so you already know what actions you can take if the remainder of the year underperforms.

Closing

Cash problems become crises when you see them too late. A 13-week view gives you something far more valuable than a forecast - it gives you time to act.

Can you confidently say what your cash position will look like 13 weeks from today? If not, that's probably the place to start.