Ten ways to improve your business cash flow and why it’s important

In a recent LinkedIn poll conducted by Tracy, 67% of you said you couldn’t live without cash flow forecasts to guide your business’s financial decisions. We were surprised it wasn’t even higher to be honest because in our view, a good understanding of your cash flow is critical. Many clients come to us because they struggle to understand why their bank balance doesn’t seem to reflect how well they think they are doing. That’s telling us it’s time to delve into the depths of cash flow management!

For a business to grow sustainably (and to successfully navigate the financial bumps in the road), cash flow needs to be your priority. And not just when times are tough, and cash is tight. Making sure that you’re maintaining an optimal level of cash on hand at all times is essential to success. It may also be wise (depending on your plans) to consider building up a war chest so that you are ready and able to take swift action if a great commercial opportunity presents itself.

why it's important to improve your cash flow and how

How to retain the best cash flow in your business?

Here are 10 key methods to improve your cash flow in the immediate but also for the long-term health of your business.

  1. Know your break-even figure – you need to know what income you need to reach each month to cover all of your outgoings. Once you know this, you can make better spending decisions and keep your cash flow at its optimal level.
  2. Create a budget and stick to it – it’s important for each income stream to be profitable. Or if it isn’t that you are doing it for a conscious and specific purpose, so you need to focus on your spending too.  Be more mindful about where your money is going and it can help you make impactful changes.
  3. Build a cash reserve – set aside any excess money you make every month into a business savings account. Financial experts recommend keeping 3-6 months’ operating expenses in a cash reserve, but you can decide how much you want to keep available.
  4. Automate your bookkeeping – using software such as Xero or QuickBooks can help you improve your cash flow. You can send out invoices immediately, get your clients to pay via Direct Debit, reconcile payments easily, and generate reports with a click of a button.
  5. Offer discounts for early payments – if you have certain clients who pay late and miss payments, you might want to offer them a 2-5% discount if they pay early. Not only does this incentivise them to pay, but it also ensures that you don’t suffer from dips in your cash flow too. Win-win.
  6. Negotiate extended payment deadlines with vendors – it’s good to set up extended payment deadlines if you can. For example, you could negotiate a 60-day turnaround for all payments or include a clause in the agreement that allows later payments a certain number of times in the year. While it may not be needed, it is good to be prepared in case you ever need to use this option. 
  7. Consider financing (when it makes sense) – your focus should be to build up a cash reserve for emergency situations as we saw during the pandemic. This means that, in a situation where you have unexpected expenses or you need a large sum, you should consider short- or long-term financing options instead.
  8. Consider leasing supplies, equipment, and real estate instead of buying – while leasing may end up being more expensive than buying in the long run, choosing to lease supplies, equipment, and real estate for a certain amount of time will help you to maintain a steady cash stream for day-to-day operations.
  9. Seek advice from a finance expert – the best way to improve your cash flow is to seek professional advice. A commercially experienced FD will help you make the best financial decisions for your business.
  10. Improve your inventory – what is your inventory turnover? Surprisingly, there could be a lot of cash tied up in your inventory, so check your inventory regularly. Are you buying too much and holding too much stock? If so, consider selling it at a discount and start buying less of it. This is something that your accountant can help you figure out.

Why is forecasting and management of your cash flow so important for a growing business?

There’s a reason people say ‘Cash is King’ when it comes to running a business. That’s doubly important when you are a small, ambitious business looking to grow. You may have initial investment, but you need to manage that wisely and use your cash flow forecasts to navigate the way ahead.

Cash flow forecasting and cash flow management is so important for businesses looking to scale-up. It’s the lifeblood of any business to keep afloat and grow. When it’s gone, it’s gone along with your reputation!

In this video, Tracy reveals her 5 top tips to improve your business cash flow.


While it’s obviously very important to improve your cash flow right now due to inflation and rising costs, as you can see from Tracy’s video, it’s essential for your business to have a healthy attitude to cash flow all year round.

How to navigate your business cash flow

Keeping a robust cash flow takes vigilance, but it will help protect your business during turbulent times, not to mention, it will also help you sleep soundly.

Are you finding it hard to keep a tight control on your cash flow, when you are trying to be everything to everyone in your business? Do you really understand how your sales translate to your current bank balance and what you can do to effect this? Good cash flow management could make the difference between sinking and swimming in the fast lane! You don’t need to do it alone nor do you need to incur time and cost of recruitment.

 We can help you to spot potential rocks or rough seas ahead so you can take action now to avoid them!

Arrange an initial chat with Tracy to see how you could benefit from our expertise to scale your business while keeping a close eye on your cash flow!


Posted by:


Caroline Cant

Payroll Manager & Finance Assistant

Caroline is a level 3 qualified ICB bookkeeper and payroll manager, she has 10 years’ experience working in industry and practise with clients from many different sectors. She has a passion for payroll and a motivation for management accounts, she believes that good business decisions can only be made with accurate numbers. Her top tip is to always budget and set aside for taxes.

Outside of work, Caroline is a busy Mum of 2 girls. In her spare time, she enjoys playing netball, doing her nails and turning her hand to some household DIY.


Nicki Kinton

Consultant Credit Management Lead

Nicki is a qualified Credit Manager, and with more than 30 years’ industry experience and more than six years as a business owner, she knows all there is to know about helping businesses manage their money and get paid on time.

Nicki believes that late payments are not the problem, they’re a symptom that a business is missing some key activity in the granting, monitoring and controlling of credit terms. Nicki focuses on reducing late payments, improving the bank balance and putting strong credit control systems in place.

In her spare time, Nicki’s an accomplished French horn player, an avid reader and also collects (and occasionally drinks) different types of gin.


Sarah Hargreaves


Sarah has been a generalist administrator for nearly 40 years thus garnering a wealth of experience in a variety of fields: HR, bookkeeping, facilities management, communications, events management, company secretarial and corporate governance.  Administrator of an interdisciplinary research centre at the University of Oxford for 14 years, since 2003 she has specialised in providing back office services to high-tech start-up companies on a flexible basis with a particular expertise in grant administration and finance, liaising with a range of funding bodies.   Sarah believes that small companies can really benefit from accessing experience as it is almost certain that the wheels have already been invented for many problems with which a company might struggle.  When working with micro companies, her aim is to release the innovators, experts and commercial leaders from administrative duties so that they are able to focus on driving their business forward.

Sarah’s secret work vice is proof-reading as she can’t see a misspelled word, misplaced punctuation or clumsy sentence without reaching for the mouse. Away from work, Sarah is happiest when in close proximity to a stage.


Philip Briscoe

Consultant Commercial Director

Philip has over 25 years’ experience working for businesses of all shapes and sizes, from start-ups to scale-ups, to multinational corporations in a variety of senior roles including commercial director, chief operating officer and chief corporate development officer. Philip studied European Business Studies at Brunel University (BA Hons), has a CIM post-graduate diploma in marketing (DipM), and has studied Executive Finance at the Saїd Business School, University of Oxford.   

Philip now works with businesses in early-stage and scale-up phases where he applies his knowledge to support in areas such as unblocking growth inhibitors, commercial strategy development, and investor-readiness for businesses looking to raise equity-based capital. 

Philip is generally kept busy by his three children and overactive spaniel, Sid. In his spare time, he is an Assistant Section Leader with the Scouts, a fair-weather cyclist, and produces a men’s mental health podcast called Mid-life Men.  

Janet Harding

Consultant Finance Director

Janet is a qualified Chartered Accountant with over 30 years’ experience working at senior levels in both the commercial and not for profit sector.

She has extensive experience of budgeting, forecasting and providing insightful financial management reporting as well as implementing new processes and systems. As a Finance Business Partner, Janet has acted as a trusted adviser assisting in key decision making.

As Financial Controller for a large Charity, Janet was responsible for all statutory reporting, ensuring compliance with Funder and Charities Commission reporting in addition to managing all aspects within the Finance department.

Janet has always aspired to be the source of knowledge and wisdom on all financial matters and be able to share this with non-finance colleagues in order for them to perform their roles as effectively as possible.

Outside work, Janet plays an active part in the community as a Parish Councillor. She enjoys travelling, going to music festivals and concerts, reading and crafting.


Kasia Szerszenowicz


Kasia started her career in 2008 and qualified as a CIMA Chartered Accountant in 2015. She has covered a number of roles within finance, leading to a Financial Controller. Kasia has broad sector experience including recruitment, media and sport industries.

She has gained substantial finance experience covering a range of functions, all of which benefit the SMEs supported by the virtual finance team. These include financial and management accounts, forecasting, payroll, domestic and international VAT compliance, audit, invoice discounting, team leadership and coaching.

Kasia is driven to seek process improvements for our clients within core areas to lead to greater efficiency. She believes people are the key driver to any business’s success.

Kasia is a dedicated Mum to two daughters and has recently taken up tennis in her free time. She adores dogs and would happily re-home every stray if she could! She applies ‘Kaizen’ to her daily life, saying “I am a strong advocate of the Japanese philosophy and a believer that you can always make things better, even when things work at a given time.”


Zuzana Wilson MBA


Zuzana is an experienced finance officer who both enjoys and is successful when working in a team environment. Her work experience has been largely customer orientated, so she is able to manage competing demands and work to deadlines. 

Zuzana is always keen to learn and improve her skills. The Smart Team, therefore, is supporting her with an apprenticeship to study AAT Level 4 Professional Diploma in Accounting (building on her AAT Level 2 and 3). She will be developing her knowledge of company financial statements, business tax, audits, credit management and cash and treasury management. 

Zuzana enjoys keeping active by running half marathons and triathlons and loves to spend time with her family.


Magdalena Adams


Magdalena is AAT Level 3 qualified. Holding a BSc degree in Sports Science from Oxford Brookes University, she has spent most of her working life in education and childcare. Having decided to change career in 2020, she now looks forward to embarking on a career in financial services and brings a keen eye for detail and wealth of enthusiasm to the team.

Zal Sethna


Zal is a qualified Chartered Accountant & Chartered Tax Advisor, with over two decades of experience across a diverse client base, focusing on accounting (financial and management), auditing, payroll, and direct and indirect taxation. 

Zal leads our virtual finance team to prepare monthly and quarterly management accounts for clients and ensure their regulatory reporting requirements are all met in a timely manner. 

His life long work mantra has been “let people get on with what they know and what they do best”. Hence, entrepreneurs should focus on building their business with the comfort that they have a strong accounting team working in the background to help them achieve their goals. Outside of work he enjoys time with his family, cycling, reading and the theatre.

Tracy Smart

Founder and Managing Director

Tracy is a firm believer that people are the key drivers of success and this is the ethos that sits behind The Smart Team. Throughout her career as a Finance Leader she understood that success always came when there was a capable team with strong leadership in place. However, this is not always possible in the early stages of a business and she recognised that a flexible finance service could help ‘scale up businesses’ achieve their growth goals. 

Within The Smart Team she helps clients feel confident in their decision making by giving insight and clarity over their finances, and she supports them build flexible finance teams that give them just the right mix of experience and technical ability when they need it.