Growing Pains: Cash Flow Strategies for Small Businesses on the Rise
by Mashum Mollah Small Business Published on: 13 April 2017 Last Updated on: 17 June 2025
None of the small business owners is immune to the cash flow concerns! At least not in this era, where unpredictability has become a major concern. The 2025 survey from the Federal Reserve says that:
Around 51% of small businesses are currently experiencing an uneven cash flow.
Almost 56% of small businesses face trouble covering their operating expenses.
No matter which industry you belong to, you must make enough sales to turn them into a successful profit.
Most importantly, you want your customers to pay on time! On the other hand, keeping track of money coming into the industry and costs going out of the company daily makes tracking and monitoring your expansion progress easier.
Read this article, as we explore the top ways you can use to manage your cash flow effectively.
Top Strategies That Can Help You Manage Your Cash Flow
Keeping up with all the tasks needed to manage a small business can be challenging. If you’re like most small business owners, chances are you’re so busy generating profits that you’ve never had enough time to manage the bookkeeping tasks.
However, if your business is expanding, it can be overwhelming.
Managing your cash flow is crucial to any small business’s success. Here are some tips for streamlining the management of your small business’s cash flow.
Create a Cash Flow Statement:
Managing your cash flow begins with creating a cash flow statement that gives you a snapshot of the business’s financial situation. Don’t confuse your cash flow statement with your balance sheet or your income statement.
Essentially, you need to create a statement that makes it easier for you to complete a cash flow analysis each month to see whether you’re on track to reach your goals or not.
Your cash flow statement should include:
- The amount of cash you have on hand
- Itemized list of operating expenses
- Cost of goods sold
- Debt repayments
- Total invoices and cash receipts
- Any other cash or income the business is owed
When you have all the items on your cash flow statement lined up, you’re in a position to do your cash flow analysis. Simply add up the cash on hand and any other income expected to come into the business. Then deduct the operating expenses, costs, repayments, and other outgoings.
Your end result will give you the cash position for your business at the end of the reporting period. If the number is positive, you’re making a profit. If the number is negative, it’s time to work out ways to cut your costs and increase sales.
It’s up to you whether you choose to run your cash flow analysis weekly or monthly, but it’s a management step that helps you stay on top of your business’s financial health.
Streamline Your Reporting:
It’s surprising how many successful business owners still don’t have an organized way to track and monitor their business financials. Many of them rely on checking the cash coming into the business but don’t really stay on top of operating expenses and costs. By the time those entrepreneurs realize there is a problem, it could be too late to rectify the damage.
By comparison, creating a streamlined way to monitor your business expenses, you’re in a position to stem spending or cut costs if the money coming into the business is slower than usual during any given month.
Credit cards for small businesses can offer an option for many entrepreneurs. Using the same card to cover expenses makes it easy to see at a glance the amount of incidental business spending throughout the month.
Some business owners may be able to benefit from using their credit card’s interest-free period to their advantage. For example, if you’re careful about always repaying the entire outstanding balance in full before the statement date, you won’t pay any interest on the amounts you’ve spent.
Managing your business might occupy the majority of your concentration, but it’s critical to ensure all of your expenses are under control on a daily basis.
Try To Be Spontaneous When It Comes To Sending Invoices
Small business owners always have a lot on their plates. One minute, they are selling a product, and the very next moment, they may be billing a customer or managing the employees.
Amid all these works, managing all the cash flows becomes difficult! Even when it comes to sending an invoice, the longer it takes, the longer they will delay all the payments.
So, you must avoid all the invoicing delays once a service or sale is complete. You can find various top-tier accounting software platforms that can offer you features to get paid a little faster!
Incentivise Your Customers
Cash in hand is always better than anything! As a small business owner, it is more like your duty to encourage your customers to pay quickly.
How to do that? Well, you can try offering them a small discount on early payments.
For example, you can offer them a 2% discount if they successfully make the payment in 10 days. Industry experts believe this is one of the simplest ways to get your money much, much sooner.
Try To Secure A Bank Business Line Of Credit
It is necessary to get a business line of credit! It is like setting up an umbrella just before the rain starts to pour!
Let’s say your cash flow is healthy now. But you can never predict the unpredictable. There can be unexpected expenses and delayed payments. Thus, you must try to set up a line of credit when things may not go as you want them to be!
Mitigate All The Financial Risks
Running a small business always comes with greater risks. But that doesn’t mean that you can never be prepared for them!
All you have to do is come up with a contingency plan that can help you to stay afloat, even in the presence of unexpected costs and a slow sales period.
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