5 ways to improve cash flow in your business

Cash flow sits at the heart of practically every business decision. Whether you’re covering day-to-day costs or planning for future growth, having money move in and out at the right time makes all the difference. But even the most organised businesses face bumps in the road when it comes to cash flow. 

Here’s how to take practical steps that not only improve your cash flow but give you more flexibility in how and when you manage it.

1) Make it easy for customers to pay you

Late payments can slow everything down. If cash isn’t coming in when you expect it, it’s harder to cover outgoings or plan ahead. The quicker you can turn work into income, the smoother your cash flow becomes. That’s why it’s worth looking at how you invoice and collect payments.

Start by removing friction for your customers, which may involve offering different ways to pay or sending invoices as soon as work is completed. You might even decide to set up automatic reminders so late payments become less frequent and you don’t spend as much time chasing what’s already owed.

Even small tweaks can help reduce payment delays and save you from spending time chasing payments that should already be in the bank. For instance, switching from emailing PDFs to using online invoicing platforms can cut your payment time by down. Research backs this up, with 65 % of companies reporting faster payment cycles after adopting e-invoicing.

2) Use surplus cash to bring down future costs

Managing cash flow often means needing to spread the cost of a big outlay, but many finance options come with rigid terms or unpredictable interest that can make planning that much harder. What helps is having a simple way to spread costs over a timeframe that suits your business, with clear, upfront fees that make future payments easier to forecast.

That’s where FlexiPay from Funding Circle comes in. It lets you split payments over 3, 6, 9 and12 months, with a flat monthly fee instead of rolling interest. You stay in control, choosing a term that works for you.

And FlexiPay also supports prepayments. That means you can log in at any time and pay off part of your upcoming balance, or even clear your full balance early. Doing so reduces your future costs and frees up credit, all from the same account. It’s built to flex when cash flow is tight and help you move faster when business improves.

Learn more about FlexiPay

3) Move beyond the present and look ahead

A clear forecast stops unexpected cash flow from putting pressure on every part of a business and helps you stay ahead by showing what’s likely to come in, what’s going out and when. It gives you time to plan around shortfalls rather than reacting to them.

Let’s say you know your biggest client typically pays 45 days after invoicing, but you’ve got quarterly rent due in six weeks. Your forecast reveals any gaps before it becomes a problem and gives you time to chase that payment early or arrange temporary cover.

You don’t need a complex system to start either. A simple spreadsheet or accounting tool can give you a clearer view of when payments are due and what’s expected in. It’s not always possible to predict everything, but even a rough guide can help you make better decisions.

4) Be tactical with your outgoings

The timing of payments often matters just as much as the amount. If you’re paying suppliers early while waiting on customer invoices, you’re covering the gap from your own cash reserves. Where possible, align your payment terms with when money comes in.

Some suppliers may offer flexibility, especially if you’ve built a solid relationship. Others might charge for faster delivery or upfront terms, so weigh up the cost against the impact on your cash position. If you’re using a short-term credit option, choose one that lets you repay on your own terms without locking you in.

5) Review regularly and adjust quickly

Cash flow management isn’t a one-off exercise. Along with general business changes, customer habits shift and your financial needs evolve over time. Keep on top of changes by taking the time to regularly review your processes so it’s easier to identify issues early and make adjustments before they become real problems.

Keep an eye on what’s working well and what isn’t. If you notice a particular client consistently pays late, it might be worth adjusting their payment terms or requiring deposits upfront. Even minor tweaks can make managing your cash flow a simpler process and less stressful in the long run.

Making cash flow work for you

Managing your cash flow doesn’t have to be complicated. It comes down to knowing your business and planning ahead while taking smart steps like invoicing promptly or using tools such as FlexiPay and its prepayment features. With the right approach, you can spend less time chasing money and more time growing your business.

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19/08/2025: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.