Small Business Cash Flow Management Tips


Do you know how much money your business currently has? Do you know which invoices are due this week and which later in the month? Many business owners know what’s in their operating bank account, but don’t have a clear idea of ​​what expenses will be owed and how much money they really need to make it through the month. and (hopefully) make a profit. Cash flow management solves this problem.

Essentially, cash flow management is about tracking and analyzing how money comes in and out of your business, then forecasting when new funds will come in and how / when you will use that money. Managing cash flow is especially critical for small and medium-sized businesses, as they often have less capital available to help them cover unforeseen costs, delays, labor shortages, or their own growth.

Managing your sources of cash flow and the uses that flow from it can literally make or break your business. A US Bank study found that 82% of small businesses fail because of poor cash flow management.

The good news is that good cash flow management is not beyond your reach, even if you are just starting your business.

Start tracking your cash flow now

If you think your business is too small to need cash management, think again. Good cash flow management can help your business become profitable faster and avoid the kind of financial difficulties that lead to the closure of so many new businesses. If you’re a solo entrepreneur or your business is very new, you can download a free cash flow tracking template to get started. If your business is a little more sophisticated and uses accounting software like QuickBooks, you probably already have a cash flow statement option.

Remember, you can’t improve what you don’t measure. Start recording expenses and income on a weekly basis and see what trends start to emerge.

Hire a certified public accountant

Many business owners start by managing their own books, only to find too late that managing the finances of the business is much more complex than balancing your family checkbook.

Worried about the expense? Consider this: How much would you pay for the following benefits for your business:

• Tax savings

• Avoid late and overdraft fees

• Learn new income generation strategies that your accountant will discover by analyzing your business finances.

• Reduce the time you spend running numbers or chasing customer checks when you could run your business

• Achieve your goals because you have a financial plan that supports them

Hiring a CPA doesn’t mean you can completely ignore your business finances. You should plan to sit down with your accountant regularly and be prepared to answer your questions. Even if a CPA pulls these numbers for you, it’s important that you understand them so that you know what steps you need to take to keep your business profitable and growing.

Understand your financial options

Some business owners take pride in being able to pay all of their bills in cash that they forget the importance of having free money (and a strong credit history) available in an emergency. This time – when money is tight and the need is urgent – is not the perfect time to go looking for funding. Work with your local SBDC to find out what financial solutions are available to you now, before you need them.

Talk to your local community bank or credit union. Ask other business owners what they’ve been through and what has and hasn’t worked for them in the past. You can even pre-qualify with some lenders in case you need funds for a big project or expanding your business.

Knowing your financial options doesn’t mean you need to take out a loan or a line of credit. It doesn’t mean your business is in trouble. That means you’re doing the smart thing ahead of time – planning for a rainy day or the next big growing opportunity.

With simple cash flow management practices like these, you can take control of the current success and future growth of your business.

Mobilization funding provides cash flow relief to business owners through contract loans and purchase order funding for commercial construction contractors, fabricators, and fabricators. Mobilization funding provides the working capital you need when you need it MOST – at the start of a project. They work with you to establish a repayment schedule, so that you pay them when you get paid. They are not looking for clients, they are looking for successful partners. Learn more about mobilization funding at

The Small Business Development Center at Western New Mexico University provides assistance to anyone interested in starting, improving or expanding a small business. The SBDC specializes in free confidential and individual advice and low cost training. Call 575-583-6320 for an appointment with a business advisor, or send an email to [email protected] More information can be found at

– Silver City office: Watts Hall, Corner Swan & Hwy 180

– Deming office: Mimbres Valley Learning Center, 2300 E Pine Street

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