Knowledge Centre

Improve Cash Flow 

Cash is king, without it, even profitable businesses collapse. 

1. What You Need to Know

Cash flow is the lifeblood of your business. 
You can show a profit on paper but still fail if you run out of cash. Accountants help you plan when money will come in, when it must go out, and how to keep enough in reserve. They also negotiate with creditors, manage payment terms, and use forecasting tools to help you avoid cash crunches. 

2. Why It Matters to You

 Improving cash flow keeps your business alive and flexible. 
 Prevents sudden cash shortages. 
Builds credibility with banks and suppliers. 
Gives you room to invest in growth opportunities. 
Reduces stress — no more month-end panic. 

3. Frameworks, Standards, or References 

 Managing cash requires financial discipline and proven tools. 

  • Frameworks to use: Cash Flow Forecasting, Working Capital Cycle, 13-week rolling cash-flow model. 

  • Standards & compliance: IFRS for SMEs (cash-flow statements), Companies Act (liquidity requirements). 

  • References: CIBA guides on cash management, CPD on working capital optimisation. 

  • What your accountant will actually do: 

  • Build rolling cash-flow forecasts. 

  • Monitor debtor and creditor days. 

  • Negotiate supplier and customer payment terms. 

  • Prepare reports for banks to extend credit or overdrafts. 

4. How to Apply

 Steps to keep your business cash positive: 

  1.  Track inflows and outflows weekly, not just monthly. 

  2. Work with your accountant to build a 13-week cash forecast. 

  3. Set clear credit terms with customers and suppliers. 

  4. Monitor debtor collections and follow up regularly. 

  5. Use dashboards to track cash availability in real time. 

5. Common Mistakes to Avoid 

Don’t let these cash flow mistakes sink you: 

  • Confusing profit with cash → You can be profitable but broke. 

  • Waiting until cash runs out → Forecast at least 3 months ahead. 

  • Offering credit too freely → Set strict terms and stick to them. 

  • Ignoring creditors → Communicate early to avoid penalties.