Cash Flow Tips You've Never Heard Before

business cash flow strategies

As a business owner, you’ve probably heard many of the same cash flow tips such as staying on top of your accounts receivable and not purchasing too much inventory. Here are some unique and practical tips for keeping the cash flowing.

Cash Flow Tips You've Never Heard Before

  • Keep your personal bank accounts and business bank accounts at different banks. Having the accounts at the same bank makes it too easy to transfer business funds to yourself when you’ve blown up your personal budget.


  • If you wait until the 15th of each month to make your 941 payroll tax payment and it’s a cash flow hardship, pay the 941 taxes the same day that you pay employees. This helps dilute the hit of the cash outflow and ensures your payroll taxes are always paid on time.


  • Analyze the timing of your cash inflows in a month and set your payroll schedule accordingly - weekly, biweekly or monthly. To help employees adjust to a change in the pay day schedule, consider implementing the suggestions below.
    • Speed up your bonus schedule. If you usually pay only annual bonuses, try paying them monthly or quarterly.
    • Speed up reimbursements. If you reimburse employees for mileage or travel only through payroll, consider paying them cash or check as soon as they present their expense reports.
    • Offer short term cash advances for the first three months of the new pay schedule.


  • If your cash inflows are the same each week, such as a retail store or restaurant, stagger when employees get paid. For example, if you pay employees on a biweekly schedule, pay half of your employees in one week and the other half in the next week. This helps match your payroll cash outflows with your weekly inflows.

Cash Flow Tips You've Never Heard Before


  • Implement a no-growth policy for your business so you can focus on managing better the volume you have now. I’ve seen too many businesses with cash flow problems choose business expansion as the solution. Expansion only served to magnify their existing dysfunction and poor management. Expansion does not always mean more profit. Due to economies of scale, you may be less profitable at a higher sales volume. If your business is profitable or close to being so, but you can’t get a handle on your cash flow, spend your time and resources on making sure you have good people, good systems and good financial controls.


  • Develop a Cash Flow Plan. You’ve heard that you should have a Business Plan, and there is a plethora of information on the Internet on how to develop one. However, business advice is silent on what a Cash Flow Plan is and how to develop one. Don’t mistake a Cash Flow Forecast with a Cash Flow Plan. If you Google “Cash Flow Plan,” you’ll get information on forecasting. A forecast just explains what you think will happen to your cash if x, y and z are also happening. A plan is a roadmap of how you are going to get from Point A to a desired Point B.  A Cash Flow Plan includes policies for receivables and debit repayments, for example.

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