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5 Tips to Improve Your Cash Flow Management

Tracey Hamilton

In the world of small business entrepreneurship, cash flow management is King! The lack of it can quickly derail your business. According to Fundera.com, a U.S. Bank study stated that a whopping 82% of failed businesses cited cash flow problems as a factor in their failure.” That is a huge percentage. Today I want to share 5 tips to help you improve your cash flow management. 

  1. Create a budget - This one is a no-brainer. You can’t begin to understand where all your money is going & plan for the future until you have a budget in place. A simple spreadsheet could get the ball rolling.

  2. Create a Cash Flow Forecast - This sounds big & scary but it’s just simply tracking where your money is expected to come from and where you expect it to go over different intervals of time. Your budget will help you to gather the data for your cash flow forecast.

  3. Track your cash flow regularly - This can be done daily, weekly, or monthly. I like to do it on a daily to weekly basis so that nothing falls through the cracks. Life can get busy inside of your business and you always want to stay on top of what is going on with your money.

  4. Understand Your Business Cycle & Timing of Payments -  It is crucial to understand when there are slow periods inside your business so that you can plan for those low sales periods within your business. Additionally, you also want to understand how your customers pay you as it relates to the timing of receiving payment vs. business obligations you might have such as loans and overhead expenses. 


  5. Create a cash reserve - This is similar to having a personal rainy day fund within your personal bank account. This will help you to continue moving forward with growing your business despite market fluctuations. 


Ensuring that you have enough cash on hand to run your business is crucial for success. Creating a budget, a cash flow forecast, tracking your cash on a regular basis, understanding your business cycle and timing of payments along with having a cash reserve can make or break your business. 

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