Intro. Healthy cash flow keeps small businesses steady. This overview explains core ideas in plain terms and suggests practical steps. It is not financial advice; consider professional guidance for your situation.
1) Cash flow in, cash flow out
Track every source of inflow (sales, services, subscriptions) and outflow (suppliers, wages, taxes, rent). A simple weekly dashboard—opening balance, inflows, outflows, closing balance—gives visibility.
2) Timing matters more than totals
Profit on paper doesn’t pay bills if receipts arrive late. Map when cash actually moves. Shorten payment cycles where possible with clear terms and gentle reminders.
3) Buffers and envelopes
Hold a modest buffer for expected costs (tax, insurance, repairs). Use separate accounts or “envelopes” for GST/tax and payroll so funds aren’t spent twice.
4) Forecast the next 13 weeks
A rolling 13‑week forecast shows stress points early. Start simple in a spreadsheet: expected receipts, expected payments, and a running balance. Update weekly and compare actuals so your forecast improves.
5) Protect margins
Know your unit economics. Review pricing, discounts and scope creep. Clarify what’s included in quotes. Small, transparent changes can protect margin without surprising customers.
Conclusion: visibility first, then optimisation
Once you can “see” cash, decisions get easier. Build the dashboard, set buffers, and update your forecast—then refine credit terms, stock levels and purchasing.
Actionable tips
- Set calendar reminders for invoicing and follow‑ups.
- Create a dedicated tax account and transfer a percentage of each receipt.
- Draft a one‑page credit policy with clear terms.
- Start a 13‑week cash forecast and review each Friday.
Key takeaways
- Cash timing beats paper profit for day‑to‑day stability.
- Buffers reduce stress around predictable costs.
- Short forecasts surface problems early.
- Margin discipline compounds over time.