Cash Flow: Strategies to Keep Your Business Thriving

Cash flow is often described as the lifeblood of a business - and for good reason. Without steady cash coming in, even profitable companies can find themselves struggling to pay bills, staff, or suppliers. For small and medium businesses in New Zealand, managing cash flow well isn’t just about survival - it’s about creating stability, growth, and peace of mind.

The good news is that with a few practical strategies, you can smooth out the bumps, avoid crunch points, and set your business up for long-term success.

Why Cash Flow Matters:

• Keeps your business liquid so you can pay expenses on time.

• Reduces stress by giving you visibility and predictability.

• Helps you take opportunities (like bulk-buy discounts or expansion).

• Makes your business more attractive to banks, investors, and lenders.

  
  

Key Cash Flow Strategies:

1. Forecast and Plan Ahead

• Use cash flow forecasting tools or simple spreadsheets.

• Look at least 3–6 months ahead to spot potential shortfalls.

• Build scenarios: “What if sales dip?” “What if a big expense hits?”

  
  

2. Speed Up Customer Payments

• Send invoices promptly and clearly.

• Shorten payment terms (e.g., 7–14 days instead of 20).

• Offer discounts for early payments.

• Use online payment options for faster turnaround.

  
  

3. Keep Costs Under Control

• Regularly review subscriptions, utilities, and suppliers.

• Negotiate better terms or bulk discounts.

• Separate “must-have” from “nice-to-have” expenses.

  
  

4. Build a Cash Reserve

• Aim to keep at least 1–2 months of expenses in reserve.

• Treat this as a safety net for unexpected slow periods.

• Consider a separate bank account to reduce temptation to spend.

  
  

5. Access to Finance Before You Need It

• Set up a business overdraft or line of credit while cash flow is strong.

• Explore invoice financing or short-term lending if needed.

• Keep your financials tidy - banks are more supportive when records are clear.

  
  

6. Align Payments with Income

• Negotiate longer payment terms with suppliers.

• Time major purchases for when cash flow is stronger.

• Spread large costs (e.g., insurance) over monthly instalments instead of lump sums.

  
  

7. Monitor and Review Regularly

• Don’t just set and forget - review weekly or monthly.

• Compare actuals vs forecasts to see where you’re drifting.

• Involve your accountant for advice and adjustments.

  
  

Quick Wins for Better Cash Flow

• Invoice immediately after work is completed.

• Chase late payments consistently.

• Offer subscription or retainer models for recurring income.

• Use accounting software (like Xero) to automate reminders and track flow.

  
  

Final Thoughts

Cash flow management doesn’t have to be complicated - it’s about staying proactive, not reactive. By forecasting, keeping costs lean, and building a buffer, you give your business breathing room to weather challenges and seize opportunities. For small businesses in New Zealand, where markets can shift quickly, strong cash flow is the foundation that keeps you not only surviving but thriving.

If you need more help with your cashflow, get in touch with your Client Manager today.