Improve your business' cash flow
The conversation usually starts the same way: "Our revenue looks healthy, but we're always scrambling for cash." Does that sound familiar?
After working with dozens of small businesses over the years, the Sure Thing team has spotted a pattern. The founders sleeping well at night are the ones who know exactly where their cash will be in three months' time.
Cash flow problems kill more businesses than lack of customers ever will. We've watched a profitable company take expensive emergency loans to cover payroll while sitting on pretty healthy order books. The frustrating part is that most of these crises were entirely predictable.
The Cash Flow Reality
Before we dive into solutions, let's acknowledge what's really happening:
The Obvious Problem:
Money goes out faster than it comes in
Customers pay late, suppliers want payment now
Seasonal dips create regular cash crunches
The Hidden Problem:
Most founders operate on ‘bank balance accounting’ - checking today's balance and hoping it stretches
Payment terms often create the cash flow gap, not the customers
Tax timing works against you instead of for you
Step 1: Stop Flying Blind
The businesses that thrive build simple 90-day rolling forecasts. Think clear view of money coming in and money going out, week by week. Include everything: that quarterly VAT payment lurking in April, the annual insurance renewal, your estimated tax bill.
We've seen founders resist this because they think cash flow forecasting requires an MBA. It requires honesty about your payment patterns and the discipline to update it weekly.
What this looks like in practice:
Weekly updates based on actual performance
Scenario planning for different outcomes
Early warning system for potential problems
Confidence to make growth investments when cash allows
Step 2: Rewrite the Terms
Here's something most business guides won't tell you: your payment terms often create the problem. If you're giving clients 30 days to pay while your suppliers expect payment in 14 days, you've built yourself a cash flow gap that no amount of sales growth will fix.
Smart founders negotiate aggressively on both ends:
Offer early payment discounts to speed up collections
Extend payment terms with suppliers wherever possible
Require deposits for larger projects
Set up direct debits and standing orders where appropriate
One client halved their cash flow stress by simply asking their three biggest suppliers for 45-day terms instead of 30. The suppliers said yes – they'd rather wait for guaranteed payment than lose the business.
Step 3: Make Tax Timing Your Friend
This is where we see the biggest missed opportunities. Corporation tax isn't due until nine months after your year-end, but many founders pay it early ‘to be safe’. This is expensive safety – that money could be working in your business for months.
Strategic tax timing includes:
Using the full nine-month corporation tax window
Timing VAT-registered purchases to maximise reclaims
Taking advantage of Annual Investment Allowance for immediate deductions
Planning equipment purchases around year-end for optimal tax relief
We helped one client save £5,000 in cash flow pressure simply by shifting equipment purchases from March to February. Same expenses, same business need, but the tax relief hit nine months earlier.
Building Your First Cash Flow Forecast: Three Approaches
If you're starting from scratch, here are the methods we've seen work best:
1. The Invoice-Forward Method (service businesses)
Start with confirmed work, add realistic payment timelines, layer in fixed costs. Stress-test with different scenarios.
2. The Pattern Recognition Method (recurring revenue)
Use 12 months of bank statements to identify seasonal patterns. Map these forward, adjusting for known changes.
3. The Scenario Planning Method (lumpy revenue)
Build three versions: conservative, realistic, optimistic. Update weekly based on actual results.
The Investment Opportunity
Good cash flow management creates opportunities most businesses miss:
Bulk purchase discounts when cash position allows
Strategic investments in growth during strong periods
Confidence to say yes to the right opportunities
Sleep at night knowing what's coming
Making It Work
Start with basic forecasting, optimize your payment timing, and use tax planning to your advantage. Most importantly, update your forecast weekly – it only works if it reflects reality rather than wishful thinking.
The goal is to avoid nasty surprises and make informed decisions about your business growth, and you don't have to figure this out alone. At Sure Thing, our full fractional finance team builds these systems for you, from strategic cash flow planning right through to the weekly maintenance that keeps everything on track.
