Eight ways to improve cash flow for your business

Cash flow challenges affect many small businesses, but there are many strategies you can use to get ahead. Discover eight ways you can improve cash flow.

#1 Get invoices out quickly

Many small businesses and sole traders regularly face waiting times of 30 days or longer for customers to pay bills. Speed up payments by ensuring you send out invoices as soon as work has been completed.

Cloud-based and electronic software can help businesses to stay on top of invoices and get them out quickly. These tools can also assist with time management and optimise cash flow.

#2 Collect payment up front

Wherever possible, try to collect payment upfront. This is particularly the case for new customers, where no payment track record is likely to exist. For existing customers, consider seeking a portion (one-third or one-half) of the money upon commissioning a product or service. The remaining payments should be linked to delivery milestones. Staggering payment milestones will help your business to cover ongoing expenses for the product or service as they are incurred.

#3 Access a powerful line of credit with a small business card

Choosing a business card with no pre-set spending limit helps many businesses to effectively manage monthly cash flow without the need to jump hoops to acquire a business banking loan. However, bear in mind that no pre-set spending limit does not mean unlimited spending.

American Express offers a range of small business ‘charge’ cards with no pre-set spending limit. By demonstrating that you have the funds to pay off your balance, Amex could provide you with a powerful line of credit, to support your business to grow.

How does a ‘charge’ card work? With no pre-set spending limit your borrowing capacity increases alongside your business. No pre-set spending limit could enable you to access much higher monthly purchasing power than if your business was to hold a standard credit card with a fixed limit.

Discover American Express business Cards here.

#4 Negotiate favourable payment terms with suppliers and partners

Many suppliers and partners allow businesses to negotiate payment invoicing terms. Negotiating optimal invoice payment terms with trade partners and suppliers will allow you to hold on to cash for longer and help improve cash flow.

#5 Consider accepting credit cards

Credit cards are the lifeblood of modern commerce. Not only are credit card payments seen as convenient and safe, they can also help to speed up business cash flow through the prompt payment of invoices.

Credit card payments are used widely by businesses, government agencies, and consumers. So, by limiting the forms of accepted payment, you could be slowing down the inflow of cash to your business.

While there is likely to be a cost associated with accepting credit card payments, there is a wide range of benefits that may help offset these expenses.

The value that American Express offers to small businesses that accept their card is undeniable. American Express runs complimentary marketing campaigns to drive customers to the doors of those who warmly welcome Amex as a payment method.

Amex boasts competitive pricing for small businesses, and the transparent pricing model means no set-up or recurring fees so the only cost is when an Amex transaction is taken. American Express’ dedication to preventing fraud and disputes will help put you at ease, as will their dedicated support teams who are there to help get you back to business quickly.

Allow your customers the flexibility to spend with their payment method of choice. You can learn more about accepting American Express here.

#6 Cut back on unnecessary business overheads

Whether you’re a small business with employees or a sole trader with a side gig, it’s likely that you are paying overheads. Overhead expenses are classified as business costs that are not tied directly to selling a product or service. Examples of common business overheads include rent, utilities, electronic software and office equipment.

Some overheads are essential to business operations. However, it’s important to regularly audit expenses. By identifying and cutting back on non-essential spending, you’ll free up cash flow for your business.

#7 Drop products and services with low-profit margins

In highly competitive industries, some small businesses sell products and services at prices so low that they don’t cover the full cost of providing them. Clearly, however, it’s difficult to operate a small business on paper-thin margins.

It’s important to regularly audit the pricing of products and services so that you are always across the cost of providing them. Where possible, try to raise the prices of products or services with thin margins. Raising prices means that you’ll have more cash coming in, which can help tide you over downturns or the late payment of invoices.

If it isn’t possible to raise your prices, consider dropping or de-listing products or services which don’t deliver adequate profit.

#8 Avoid bad debt

Many small businesses experience situations where customers refuse to pay up long after their bills are due.

However, you can insulate your business from the impact of bad debt by requiring that new customers pre-pay until they have a track record with your business.

Business owners should regularly review the credit of existing customers before extending payment terms and only provide a line of credit to those with solid payment records. By following these steps, you’ll avoid bad debt and the detrimental impact it can have on cash flow.


From time to time, many small businesses struggle with cash flow problems. However, most cash flow issues can be solved with the right strategy and support.

Fees, charges and Terms and Conditions apply. All information is correct as at 28 April 2020 and is subject to change. Cards are offered, issued and administered by American Express Australia Limited (ABN 92 108 952 085).

No pre-set spending limit does not mean unlimited spending. Your purchases are approved based on a variety of factors, including current spending patterns, your payment history, credit records, and financial resources known to us.

This article has been prepared in partnership with American Express

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