How small businesses can improve cash flow

THIS IS REALLY A WORKING CAPITAL ARTICLE

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By understanding and effectively managing a healthy cash flow, businesses maintain financial stability and can invest in growth or expansion.

But once you’ve got a handle on your cash flow, the next step is making your surplus funds work for you. Here’s how you can take control of your cash flow - and start earning interest on your reserves.

Get your revenue in faster  

Late payments tie up valuable cash resources, it is critical small businesses speed up receivables.

• Review payment terms in your industry and ensure you're in the first quartile - for example dont provide 30 day payment terms if some of your competitors provide 15 day payment trime
• Send invoices immediately. Whilst a month end process may feel efficient on human resources you are losing out on utilising cash resource for days, weeks or worse - months.
• Offer multiple payment options to reduce any potential payment friction.
• Automate payment reminders to nudge customers without draining your time.
• Incentivise early payments with small discounts.

Drive your days payables out

Are you paying suppliers faster than customers pay you? That mismatch can significantly hurt cash flow—and your earning potential.

Negotiate longer terms with suppliers wherever possible, to hold onto cash longer.

Forecast and Invest

A basic cash flow forecast for even 3–6 months ahead can identify cash reserve trends, and opportunities where spare cash can be put to work. Aim to set aside 1–3 months of operating expenses.

Consider Earnr’s Everyday Account for funds you’ll need soon, or Earnr Notice Accounts to earn interest on funds you won’t need for 30 or 90 days.

Manage expenses effectively 

Staying on top of outgoings requires regular reviews of expenses. From software subscriptions, to travel and transport, and bank fees and interest, look for areas where behaviour change could reduce monthly costs.

Review financing

Cash flow loans, invoice finance, or business lines of credit can help smooth out timing issues as well as spreading payments out for large items.

The bottom line

Improving cash flow doesn’t require a major overhaul. Small, consistent changes like faster invoicing or smarter spending, can unlock surplus cash. And once you’ve got that buffer, Earnr helps you turn it into monthly income.

The difference between leaving your money in a low-interest bank account and investing it with Earnr could be the key to buying new equipment, hiring top talent, or funding your next growth phase.

Ready to put your money to work?

The information in this article is intended to be factual though may also contain the opinion of the author. Whilst every effort has been made to ensure accuracy, we take no responsibility for any errors or omissions. Any opinions are those of the author alone and not a recommendation to take any action or obtain any product. You should consider whether this information is appropriate for you, and seek professional advice before making any decisions.

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