It doesn’t matter how great your product is or how many clients you’ve booked—if your cash flow isn’t under control, your business is at risk.
Cash flow is the heartbeat of any business. It’s what keeps the lights on, pays your team, covers inventory, and fuels growth. But for many business owners, managing that flow of money in and out feels like a constant balancing act.
At Estess CPA, we’ve worked with countless businesses that are profitable on paper but struggling with cash flow behind the scenes. The good news? With the right approach, you can take control of your cash flow—and sleep a little better at night.
Here are some key tips every business owner should know.
1. Know Where Your Cash Is Going (and When)
It sounds obvious, but many business owners don’t have a clear picture of when money is coming in and when it’s going out. It’s not just about the total—it’s about timing.
What to do:
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Set up a cash flow statement and review it monthly.
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Track inflows (payments, sales) and outflows (rent, payroll, supplies).
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Identify patterns: Are there regular gaps where expenses hit before payments arrive?
A little clarity goes a long way toward better decisions.
2. Speed Up Your Receivables
The faster your clients pay, the stronger your cash position.
How to improve cash collection:
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Send invoices promptly—don’t wait.
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Offer small discounts for early payments if it makes sense for your margins.
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Consider requiring deposits for large projects.
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Make it easy to pay: credit cards, ACH transfers, online payment portals.
Remember: The longer you wait to invoice, the longer you wait to get paid.
3. Watch Your Payables Without Burning Bridges
Stretching out your payments strategically (without damaging vendor relationships) can help you hold onto cash longer.
Try this:
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Take full advantage of payment terms (net 30, net 60).
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Prioritize payments to suppliers that are essential to your operations.
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Negotiate terms where possible—many vendors are open to it.
The key is communication. A good relationship with your vendors can be just as valuable as the product they supply.
4. Build a Cash Reserve (Even if It’s Small)
Every business hits slow periods, unexpected costs, or delayed payments. A cash cushion can be the difference between navigating a rough patch or scrambling to cover payroll.
Goal:
Aim for at least one to three months of operating expenses set aside in reserve. Even if you can’t hit that number right away, start somewhere. Small, consistent contributions add up.
5. Forecast Your Cash Flow—Not Just Your Revenue
Revenue forecasts are great—but they don’t tell you if you’ll have enough cash on hand to pay your bills next month.
Include in your cash flow forecast:
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Upcoming invoices and expected payment dates
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Planned expenses (fixed and variable)
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Seasonal trends
Use this forecast to spot trouble early—before it becomes a crisis.
6. Control Inventory Like a Pro
If you sell products, inventory management plays a huge role in your cash flow. Too much inventory ties up your cash. Too little can hurt sales.
Tips to keep inventory from eating your cash:
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Monitor your best-selling items and stock appropriately.
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Don’t over-order just to get volume discounts if it locks up too much cash.
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Use inventory tracking tools to avoid surprises.
7. Avoid Overextending on Credit
Business loans and lines of credit can be helpful—but they’re not a fix for poor cash flow management.
Smart credit use looks like this:
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Use credit strategically for growth opportunities (like purchasing equipment that boosts revenue).
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Avoid relying on debt to cover day-to-day expenses.
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Know your repayment terms before signing on the dotted line.
Good cash flow habits reduce the need for emergency borrowing.
8. Stay on Top of Tax Payments
Taxes have a funny way of sneaking up on business owners who aren’t planning ahead. Unexpected tax bills can drain your cash reserve quickly.
How to stay ready:
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Set aside a portion of your income for taxes as you earn it.
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Work with your CPA on estimated tax payments throughout the year.
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Review your tax strategy annually to avoid surprises.
9. Keep Your Books Updated—Always
Outdated or inaccurate books lead to bad decisions. Without reliable numbers, you’re basically flying blind.
Make sure your bookkeeping is:
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Up to date (monthly at minimum)
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Categorized correctly
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Reviewed by a pro (especially before big decisions)
If bookkeeping isn’t your thing, hire someone. Good books are worth every penny.
10. Know When to Get Help
Sometimes, managing cash flow isn’t about working harder—it’s about getting the right advice.
At Estess CPA, we help small businesses:
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Build cash flow forecasts
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Spot cash leaks
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Plan for taxes and big expenses
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Create a plan that fits their business—not a one-size-fits-all approach
Need a Better Handle on Your Cash Flow?
Don’t let cash flow issues hold your business back. Whether you need help getting organized, planning ahead, or just figuring out where the money is going—we’re here to help.
Contact Estess CPA Today
📞 Belle Chasse Office: (504) 433-5122
📞 Luling Office: (985) 785-1470
📧 Email: [email protected]
🌐 Website: www.estesscpa.com
Let’s make your cash flow one less thing to worry about.
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