Poor cash flow is the leading reason small businesses struggle — even profitable ones. Here are the strategies that keep your business running smoothly.
Why profitable businesses still struggle
Cash flow problems kill profitable businesses. A company can be earning solid margins on paper while simultaneously running out of money because customers pay slowly, expenses hit all at once, or growth outpaces working capital.
The 13-week cash flow forecast
The most important habit is maintaining a rolling 13-week cash flow forecast. This is not a P&L — it is a week-by-week projection of cash in versus cash out. Updating it weekly forces you to see problems before they become crises, not after.
Accelerate receivables
On the receivables side, implement net-15 or net-30 payment terms and enforce them. Send invoices immediately upon delivery or completion. Offer a small early payment discount (1–2%) if cash is tight. For larger projects, bill in milestones rather than at completion.
Stretch payables intelligently
On the payables side, negotiate payment terms with your suppliers. If you are on net-30, ask for net-60. Pay on the last day terms allow — not early. This is free short-term financing you may not be using.
Using a line of credit correctly
When you do need external capital to bridge a gap, a business line of credit is the most efficient tool. Used correctly, a line of credit lets you draw funds when receivables lag, then repay as collections come in. The cost is only on the outstanding balance, making it far cheaper than term debt for short-term gaps.
lendflo Team
Business Financing Specialists
