The ultimate list on how to improve cash flow for financial success. Positive cash flow is crucial for any business’s financial success and its survival. If your cash flow is in a poor condition, your company is in major trouble.

There are a lot of tips and methods on how to improve poor cash flow, and most of them hold good advice in them but are usually incomplete. So, here is the ultimate list of 23 ways you can improve the cash flow of your business from all the aspects. As a business owner, you should know that cash is king.

Tracey Loubser, a Calxa Partner and the founder of multi-award winning business, Confident Cashflows shares some ideas on where to start. Tracey’s experience in working for small business has provided her with the insights to help businesses.

Article first published in SavvySME in October 2017. Permission was given by author for this article to be published here.


Lethargic or Negative Cashflow

One of the top 4 reasons small businesses fail is due to a lethargic or negative cash flow. Below are a few stats to prove it.

  • 20% of businesses fail in the first year.
  • Of all the small businesses that started in 2013 (1-19 employees), only 63.4% survived 3 years later.
  • 43.7% report “inadequate cash flow” as the reason for failure.
  • 33.9% report trading losses which affect cash flow.

A lot of advice on cash flow tend to focus on one issue: managing the timing of goods and payment.

  • When you receive money from your customers,
  • The time you pay your suppliers, and
  • How long you keep stock on the floor before you sell it.

However, after successfully working with SMEs for nearly a decade, I believe that it is a lot more than just timing. Sure, it does have a profound impact but it’s not the only factor affecting your company’s finances.

Cash flow leakages can happen to any business, even those who don’t hold any stock, whose customers pay in advance or on time, and whose biggest “supplier” cost is their staff.


5 areas where you can improve cash flow

I’ve outlined 5 main categories which make a difference to your business lifeline. Not every item in this list will apply to every business, so I encourage you to take what applies and not stress about the rest.



This is where it all starts. Without customers, sales or income, your cash flow is pretty much stuffed. In fact, you won’t have a business to show for. If your cash flow is poor, then you can use the strategy of increasing revenue or income to offset your troubles.

  1. Think of add-ons to your suite of offerings.
  2. What can you sell or offer that customers need after buying their first product? Every product can have an add-on service such as maintenance. Every service can have an add-on product. What’s yours? Explore your “would you like fries with that?” value.
  3. Using your skills and knowledge, you can offer or teach a Do-It-Yourself (DIY) model. A website designer client of mine, who specialises in SEO services, hosted 2 sold out SEO workshops teaching the basics of SEO and blogging. That was a great money spinner with very little cost to deliver. How can you apply the same model to your business?
  4. Try switching to a model where you get recurrent sales, such as leasing instead of selling outright. What can you offer or sell monthly, quarterly or annually? This works for both products and services.
  5. Offer packages at better payment terms. However, beware of getting into the habit of discounting. Make sure you know how much profit you make and that your discounts won’t make your business suffer. If you mark up your product by 25% – and make a 20% gross profit – discounting by 10% means you need to double the number of units you sell to maintain the same level of profit.
  6. When was the last time you increased your prices? You should review prices from time to time. If this scares you, then do it one product, service, or group at a time.
  7. Can you deliver your product or service in a shorter time frame while maintaining your price and value? If you are a service based business, try cutting labour hours. Remember, time is money! On the flip side, think of how you can improve efficiency to deliver the same product.



  1. Hunt down any financial leakages. The usual areas where you can reduce are phone, fuel, utilities, and office supplies. Review your sales and marketing costs. Are your advertising campaigns working? Are you tracking where your leads are coming from? Can you reduce that cost?
  2. Look for any hidden costs associated with delivering your product/service which is draining your profit: freight, motor vehicle costs, bits & bobs. Can you charge your clients separately on a new line to recover these costs? Some accountants and lawyers charge a % disbursement cost to recover printing and stationery.
  3. Get rid of products and services which are less or not profitable. These items drain your bank account and suck away your time. My clients have managed to cut offerings overnight and make more money and gain more time.
  4. Review your team. You can convert staff to casual as full-time employees tend to cost more. You can also try outsourcing. Make sure you get HR advice in this area.
  5. Contact your landlord to get a better deal. They may be open for negotiations as rent paid is better than no rent from a tenant that has closed their shop. If that doesn’t work, do your best to get rid of that corner posh office.
  6. Monitor your spending like a hawk. Never let go of the financial reins. This is your business’s lifeblood, so watch it carefully.
  7. Make it easy for customers to pay you via your online accounting system or invest in a system that accepts credit/debit cards. Always, and I mean always, be in control of how and when you get paid. (Beware of the new rules relating to excessive credit surcharges effective 1 September 2017).
  8. For high-value sales, offer your customers or clients payment plans. Never, and I shall say it again, never deliver the complete service or product upfront under a payment plan if you don’t have control over when or how you get paid such as having their credit card details. It is best practice to make sure your costs are covered in the first month at least. If applicable, it is recommended that payment is recovered 50% (month 1), 30% (month 2) and 20% (month 3).
  9. Set aside some time every week to review your debtors (accounts owing to you). Follow up via phone, followed by text, email, and then post a statement as often as necessary to get the money in as fast as possible. We all know what happens with the squeaky wheel.
  10. Invoice for your sales as soon as possible. The best option is invoicing on the same day of delivery or purchase. Billing in advance is even better. Make this a habit or part of your company policy.


Money you owe

Amanda Penfold of Venrock Finance, generously shared these insights;

  1. Contact a broker or your bank to review your financing options on all current debts. Can you refinance, restructure or consolidate to minimise monthly outgoings?
  2. Check your debtor payment terms. Are they placing a strain on your cash flow? Would your business benefit from receiving 80% of issued invoice value within 24 hours by utilising a debtor finance facility?
  3. What about your vehicles and equipment? Research and negotiate better refinancing options, which will reduce the strain on your cash flow.
  4. DO NOT neglect your tax commitments or ATO debt. This is often the first point of neglect when businesses are struggling with cash flow. The ATO has more power than ever before and can negatively affect your credit rating.


Your personal drawing or wage

When cash flow gets a bit tight, business owners tend to take too long to review their personal spending habits, which were previously supported by good business profits and a healthy bank account.

  1. Rigorously review your personal spending habits. Can you cut down on your personal salary, in the short term at least, to support a cash flow crunch in the business. Nothing is forever. Besides, you may even find that you can adapt with a lower wage.
  2. Be open and honest to your spouse or partner. Awareness, and not panic, will support the entrepreneurial spirit to think outside the box to improve profitability.
  3. Contact your financial planner and review your personal insurances & super payments. Are you overpaying and can you find a better deal?


Finally, remember to always seek professional advice regarding your finances. These ideas may work for some businesses but not for others, as they all depend on your circumstances, goals, and industry.


Want to take your cash flow to the next level?

You’ve improved your cash flow and now you want to grow your business further. Get tips on How to Manage Your Cash Flow For Growth in our blog.



About the Author

Nearly 10 years ago, after a 5-year stint with Deloittes, and a brief stint in corporate, Tracey Loubser made the conscious decision to NOT be a normal tax and compliance accountant. Instead she became a “let’s-get-this-business-achieving-its-potential-and-make-more-profit” accountant, and after achieving great results for many SMEs, with Calxa as an integral part of her product delivery, she became known as The Queen of Cash Flow. Through Tracey’s multi-award-winning business, Confident Cashflows, Tracey has helped many business owners achieve higher profits & improve their cash flow.

Five years ago she launched Confident Cashflows PLUS, where she trains, coaches and mentors accountants to follow her Turn Key program and learn from her experience to deliver successful Financial Performance products with their clients. Tracey has been recognised among her community as a leader in her field by winning many awards including 5 local chamber awards, Best Home Best Business in Regional WA in the SBDC awards, and was Top 8 Finalist in the Nationally based Australian Accounting awards in the Thought Leader category.

Tracey is also the author of Resuscitate your Business Goals, How to Heal Cash Flow Crunch and Beat Small Business Stress.