5 Tips to Improve Business Cashflow

Cashflow is the lifeblood of every small business. You can have strong sales and even show a profit, but if money isn’t flowing in and out at the right times, it can put real pressure on your business. Many owners describe cashflow issues as one of the most stressful parts of running their business — and it doesn’t have to be that way.

In 5 Tips to Improve Business Cashflow, we’ll explore practical strategies you can use to strengthen your cashflow, build stability, and create more confidence in your day-to-day decisions.

1. Understand Your Cashflow

   
   

The first step is awareness. You can’t improve what you’re not measuring.

Tracking inflows (money coming in) and outflows (money going out) gives you a clear picture of your business health. Don’t just look at profit and loss statements — they can hide timing issues. For example, you might look profitable on paper, but if clients are slow to pay, your bank account tells a different story.

Simple tools to start:

• Xero’s cashflow dashboard & reports.

• A rolling cashflow forecast using Xero & Syft.

Tip: Review cashflow weekly, not just monthly. Small changes show up quickly, and you can course-correct before issues grow.

2. Speed Up Invoices & Payments

   
   

One of the most common cashflow problems is waiting too long for money that’s already owed to you.

Practical steps:

• Send invoices immediately after the job is complete or setup reoccurring invoices in Xero for subscription based services.

• Offer multiple payment options (EFT, card, online gateways).

• Follow up on overdue invoices early, and set payment reminders in Xero — don’t wait 60+ days.

Tip: The quicker you turn work into cash, the less stress you’ll feel juggling bills and wages.

3. Manage Outgoings Proactively

Outgoings are just as important as income. Too often, expenses “creep” in unnoticed.

Ways to stay ahead:

• Negotiate supplier terms where possible.

• Spread out large bills into instalments if it helps smooth cashflow.

• Regularly review subscriptions, utilities, and recurring expenses — you’d be surprised what adds up.

• Use business credit cards or overdrafts

Tip: Every dollar saved is a dollar that improves your buffer.

4. Build A Cashflow Buffer

A healthy buffer turns cashflow management from stressful to strategic.

Aim to set aside a small percentage of income into a separate reserve account. Even a modest buffer can cover slow months, delayed invoices, or unexpected costs without panic.

Tip: A cash buffer can smooth out the highs and lows of the year.

5. Use Forecasting to Stay Ahead

Cashflow forecasting isn’t complicated, but it is powerful. By projecting your inflows and outflows over the next 3–6 months, you’ll see risks before they arrive.

Unlike looking backward at last year’s figures, forecasting is about preparing for what’s ahead:

• Do you have enough to cover BAS and superannuation?

• Will upcoming wage rises cause a shortfall?

• Can you afford to take on that new staff member or equipment purchase?

Tip: Good forecasting gives you clarity, confidence, and direction.

Final Thoughts

Improving cashflow isn’t about luck — it’s about planning, discipline, and having the right tools. By understanding your numbers, speeding up payments, managing expenses, and building a buffer, you’ll create a business that runs more smoothly and supports smarter decision-making.

Take the Next Step

At True North Accounting & Advisory, we help businesses take control of their cashflow with tailored strategies, clear insights, and a plan to strengthen your business finances.