Cash Flow is Reality

The saying goes, “Turnover is vanity, profit is sanity, but cash flow is reality.” A business can be profitable on paper and still run into trouble if cash is not managed well.

If you find yourself worrying about paying wages, waiting too long for customers to settle invoices, or being the last to get paid, it may be time for a cash flow reality check.

Here are practical ways to improve your position:

1. Speed up payments.
Invoice promptly, ask for deposits, and follow up before payments are due. The more frequently you call customers, the quicker you are paid.

2. Use automation.
Direct debits and standing orders ensure on-time payments and reduce administrative effort.

3. Offer incentives.
Reward clients who pay early with discounts or added value.

4. Reduce costs.
Review suppliers, renegotiate prices, and improve efficiency to get more from every pound spent.

5. Monitor cash weekly.
Set up a simple checklist to track what is in the bank, what is due in, and what must go out. Regular monitoring prevents surprises.

6. Understand bad debts.
Even one unpaid invoice can require thousands in extra sales to recover the loss. Prevention is better than cure.

Improving cash flow is often simpler than it seems. By combining discipline with the right systems, you can reduce stress, sleep better, and focus on growth rather than firefighting.