101 Tips for Better Cash Flow

Creating better cash flow is not just about selling more than you spend. Sales have to be paid for and the timings of cash in and out of the business have to be managed carefully.

Offering credit terms to customers can be a huge factor in securing new business. It can also be a considerable risk to your business as you wait for payment.

Effective cash flow management and credit management strategy are your tools for managing the risk.

We have compiled this list of 101 things you can do to help you achieve better cash flow.


To ensure a co-ordinated approach to credit management across the whole business you need to have a clear set of rules that prescribe the procedures staff should follow when trading on credit terms. These are usually documented in a Credit Policy.

1. Set your Order to Cash Strategy

By clearly documenting what should happen, and who should do it, from the moment the order is placed until the invoice is paid, your business can follow a co-ordinated and professional credit control procedure.

2. Create A Process for Managing Late Payments

Define the activities, timeframes, and tools for managing late payments. This can include reports, letters, escalation process, suspension of services, charging interest and referral to debt collection agencies or legal action.

3. Define Customer Acceptance Criteria

Each potential customer poses a risk to your business and can be given a risk rating. Be clear about what mitigation you need to have in place to accept an order from each risk category. This is about finding ways to say yes to an order, though there will be some risks you’re just not prepared to take.

4. Set Clear Authority Levels

Be clear about who can agree to any deviation from the process or acceptance criteria and how that sign off is documented. It shouldn’t be everyone!

5. Set Credit Limits

Decide how much credit you’re prepared to give each customer. You can base this on the recommended limits in credit reports, or on your own research and risk appetite.

6. Segment Your Customers

By segmenting your customers, you can tailor your processes for each category as appropriate. You may not be as stringent with enforcement of policies with Key Accounts as you would with smaller, lower value/margin customers.

7. Train All Staff

Everyone in the business should understand the Credit Policy and how it affects them, not just credit control staff.

8. Ensure the Credit Policy Is Consistently Followed

Nominate someone who is responsible for managing the Credit Policy and ensuring all staff stick to it.

9. Know How Much Credit You Can Afford to Give

It’s tempting to accept every order as it comes in, but if each order comes with up front costs you need to be sure you can afford to fulfil all orders accepted. Overtrading is a very real danger for a growing business.

10. Link Sales Incentives to Payment

A sale is not a sale until it’s paid for. If you link sales incentive bonuses to paid invoices this makes the sales team more invested in selling to customers who are able and willing to pay on time rather than focusing purely on turnover.

11. Have the Right Resource to be Effective

Credit management takes time and a specific skill set. As your business grows ensure your resources keep pace with your growth to remain effective.


Are they really who they say they are? How do you know they will be a good customer? Do you know if they are able, and willing, to pay for what they buy from you?

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12. Use a Customer Information Form

If you have a standard form that you ask each customer to complete, or you complete, it acts like a check list to ensure you have all the information you need to manage the relationship effectively.

13. Know Your Customers Full Legal Name

Identify the legal status of your client, sole trader, partnership, limited company etc, and the correct legal (registered) and trading names. The registered name is essential if you need to take further action to recover late payments.

14. Check Your Customers VAT Number

If your customer is VAT registered, you can check their VAT number to confirm they are who they say they are.

15. Do a Credit Check on First Order

Credit Reports collate lots of financial information about a business and can give you good insights into their ability and willingness to pay on time. You can use the information to decide how much credit you’re willing to give them.

16. Credit Check Established Customers Too

Regularly check the creditworthiness of your existing customers. Circumstances change. You can use this information to help your sales team target existing customer to sell more to as well as managing the risk of late payment.

17. Monitor Your Biggest Customers

Credit Reference agencies offer a monitoring service where you can get notifications of any significant changes on your customers circumstances that may affect your willingness to extend credit. Such as new CCJs, Directors resignations and insolvency activities.

18. Get the Contact Details for Accounts Payable

The most important contact you will have will be the one that pays your invoices. Make sure you have phone and email contact details for them from the outset.

19. Know when Accounts Payable Work

Not everyone works full time. Establish the working hours of your Accounts Payable contact. There’s no point chasing for payment in their non-working hours!

20. Understand your Customers Payment Process

The bigger a business is the less likely it is that payment can be made as quickly and simply as logging into a mobile bank app and scheduling a payment for that invoice that you’ve just sent them.

21. Establish when your Customers Does their Payment Runs

The bigger the business the more likely it will be that they’ll have fixed payment run times. Find out of these are weekly, twice a month or at month end, and if they can make ad hoc payments at other times. Larger businesses are unlikely to change their payment run dates for one business, so you need to factor in their payment run dates to your credit control processes.

22. Look on Companies House

Check out the filed accounts on Companies House to give you an understanding of their financial situation. Remember though that filed accounts are already several months out of date.

23. See if they have signed the Prompt Payment Code

The Prompt Payment Code (PPC) is a voluntary code in the UK that sets standards for payment practices and best practice.

24. Check when Large Businesses Pay Their Suppliers

“Large” businesses are required by law to report on their UK payment practices twice per year. You can find out the average time it takes for them to pay their suppliers and the proportion of payments it doesn’t pay on time.

25. Check for CCJs

Credit reports and Trust Online will show if your customer has any County Court Judgements (CCJs) against them. This is a good indication that they have a history of not making payments.

26. Check in with your Network

If you have a good business network, chances are they know something about your prospective customer. They may be able to tell you about their payment habits.

27. Look out for Warning Signs

Keep an eye out for signs your customer may be experiencing a change in circumstances that could have an impact on their ability to make payment on time.  

28. Follow Industry News

Trends and developments in different sectors could indicate potential economic impacts on your customer that could affect their ability to pay you.


Terms and conditions are one of the most important aspects of any transaction between your business and your customers; whether you provide a service or sell products. They keep your business competitive and protect your cash flow.

29. Put Them in Writing

Verbal agreements are fine, until there is a dispute. Remove all opportunities for misunderstanding and have them written down. If things go wrong with your relationship with your customer, hiring lawyers to unravel what was agreed by whom can be incredibly expensive

30. Get Expert Help

It is a breach of copyright to repurpose another business’s Ts & Cs for your own business. Free templates can be useful but may contain clauses that are not relevant to your business, or worse, not include things you really need. A professional will know what these are and can ensure you are legally compliant in all your transactions.

31. Avoid Jargon

Use plain English. Make them easy to read, you need to understand them to be able to explain them to your customer.

32. Set Expectations

Your Terms and Conditions enable you to be specific with your clients about what you expect from them and conversely, what they can expect from you.

33. Compare to Your Competitors

Are your competitor’s terms more favourable and is that costing you business?

34. Explain the Most Important Terms

Terms are more likely to be agreed and adhered to if you have had a conversation with your customer to go through the most salient points.

35. Request Down Payments on Larger Orders

Having a deposit reduces the likelihood of a financial loss in the worst of circumstances when you’ve had to pay out costs in advance to fulfil the order.

36. Get Explicit Agreement

Get a signature from your customer to show they have accepted your Terms. If a signature is not practical get an email confirmation from they that they accept them.

37. Review and Update Regularly

Your business changes, the market changes, and the law changes. That means your terms should adapt to meet those changes.

38. Consider Requesting Personal Guarantees

If your customer poses a particularly big risk, consider asking for personal guarantees from the directors of the company. This means that they will be personally responsible for paying the debt should the business be unable to pay you.


Invoicing is a critical part of any business’s processes. Without invoices your customers won’t know how much and when they need to pay you. And without any money coming in, your business won’t survive for long!

39. Send as Soon as Possible

The best time to send your invoice is as soon as possible after you’ve delivered the goods or done the work. If you’re invoicing for an advance payment, then do it as soon as you have contractual agreement.

40. Put the Due Date on Your Invoice

Remove any ambiguity of terms by giving a specific date by which you expect payment.

41. Send to the Right Person

That’s the person who pays them. Invoices sent to, say, a buyer who isn’t prompt in passing them on to accounts payable causes unnecessary delays.

42. Keep the Design Simple

Different customers will manage invoices in different ways. Larger customers may scan your invoices into invoice reading software feeding into their accounting software. Others will print, process, and file your invoice manually. The common thing all customers need is a simple but smart layout.

43. Make it Easy for Customers to Pay You

Give your client a range of ways to pay you. There are lots of options these days, such as Stripe or GoCardless as well as Bank transfer. Make sure your bank details are on your invoice.

44. Make Sure They are Accurate

Next to never having received the invoice, incorrect or missing details on the invoice is a top reason for late payment.

45. Confirm Receipt

“We didn’t receive the invoice” is one of the most common excuses for late payment. A courtesy call to confirm receipt, particularly if it’s the very first invoice for that customer, eliminates this excuse.


Late payments make it very difficult to forecast your cash flow with any degree of accuracy. Also, the longer you ignore late payments the more of a struggle it will be to re-educate your clients to paying on time.

46. Know When Every Invoice Will Go Overdue

Used aged debt reports and sales ledger data to keep track of invoice due dates

47. Remember It’s Your Money!

Don’t feel guilty or uncomfortable about asking for your money. You entered into a business transaction and you have upheld your end of that transaction. It’s not personal.

48. Don’t Delay

Start chasing as soon as it goes overdue. The older a debt gets the less likely it is that it will get paid in full. Any queries need to be resolved quickly while the transaction is fresh in everyone’s minds.

49. Stick to Your Process

Consistency is key to effective credit control. You went to all the trouble to build a process, so use it consistently. If you find yourself skipping steps regularly review the process.

50. Prioritise Chasing

Prioritise chasing of oldest and largest debts first. These will have the biggest impact on your cash flow.

51. Get Your Facts Right

Preparation before a call is crucial. If you’re ill-prepared it’s all too easy to lose control of both the call and your credibility.

52. Pick Up the Phone

Don’t hide behind email. Every chance to talk to your customer is an opportunity to build the relationship if the call is handled tactfully. You can have much more of an impact over the phone and it’s easier to spot when you’re being fobbed off!

53. Don’t take Everything at Face Value

Excuses are often a delaying tactic. Ask probing questions to either catch out the lie or get to the crux of the problem.

54. Keep Emotion Out of It

Sometimes embarrassment may make your customer be aggressive when you as for payment. Let them have their say, stay calm, and then ask your probing questions to get to the bottom of the issue. You might find it more effective to politely end the call and try again later if the client gets very aggressive.

55. Use the right Language

When we communicate with others we tend to use language and behaviours that we are most comfortable with. But not everyone will respond to those words and behaviours as we would, so chose your words carefully.

56. Set Expectations

If your customer agrees to do something but doesn’t set a time limit on it, you set one. Tell them that if you haven’t heard back from them by X date and time, you’ll give them another call. This give them the motivation to do as they have promised.

57. Follow Up in writing

Confirm by email any actions customer agreed to take. This acts as a reminder to them and helps them realised that you won’t forget about it.

58. Diarise Follow Ups

Use a diary system and reminders to make sure you do follow up.

59. Be Persistent

Consistency is key. If you slow down on your chasing activity you are sending the message that it’s not really an issue for you after all.

60. Follow Through on Promises and Warnings

If you say you’re going to do something, then do it. Not acting when you say you will undermine your credibility and label you as unreliable. Customers will be less inclined to trust or believe you in the future.

61. Escalate

If you’re having little success talking to your Accounts Payable contact, escalate to the Manager or Finance Director.

62. Charge Interest on Late Payments

The Late Payments of Commercial Debts (Interest) Act 1998 allows you to charge interest on business to business debts that have gone beyond payment terms.  Get to know what your legal rights are.

63. Log All Activity

Keep a record of all calls, letters, emails and meetings with your Customer. This helps if someone else is picking you credit control activity or there is a dispute.

64. Compile Stop List

Your terms should warn clients that persistent late payment may result in services being suspended. The stop list should be shared across the business to ensure no one is actively marketing to a customer who is on stop.

65. Consider the Relationship

It’s important to consider the segment your customer is in when applying your credit management processes. Some segments may warrant more leeway than others, given the value of the relationship.

66. Report Late Paying Customers

You can challenge the status of a signatory to the Prompt Payment Code, or report a problem with getting paid to the Small Business Commissioner

67. Get Rid of Repeat Offenders

No one likes to terminate a client, but sometimes you have to ask yourself if they are worth the effort when they are consistently paying late and taking up a lot of your time.

68. Don’t Tolerate Bullies

Bully clients think if they push their weight around, they’ll get what they want. Sometimes it works because small businesses don’t know how to handle them. But, when you let a customer bully you, you’ve lost their respect and set yourself up for a relationship of further abuse.


Disputes are often a delaying tactic, the way you handle them sets the tone for the relationship and the speed at which you get paid.

69. Ask for a Part Payment

If the customer is disputing part of an invoice, ask for payment on the undisputed part.

70. Be Prepared

Make sure you have all your records to hand, such as correspondence, delivery notes and invoices so you can handle the dispute efficiently.

71. Remain Professional

When a customer presents you with a complaint, no matter how emotional they get, keep in mind that the issue is not personal; he or she is not attacking you directly but rather the situation at hand. A person who remains in control of his or her emotions deals from a position of strength.

72. Resolve Quickly

Disputes are uncomfortable, no one likes to think that they may have made a mistake. Don’t ignore them in the hopes they will go away. Investigate and resolve quickly to minimise the impact on your cash flow.

74. Track Disputes

Keep a record of all disputes. This will help you to establish patterns, either in the types of disputes or identify customers who are ‘frequent flyers’.

75. Learn from your Disputes

Bill Gates said, “Your most unhappy customers are your greatest source of learning”. Treat complaints and disputes as an opportunity to review and refine your processes.


Collecting debt and providing good customer service can be a fine balancing act. The need to maintain a positive and friendly approach whilst collecting payments demands particular skills.

76. Keep in Touch

Check in with your key customers regularly, not just to chase for payment, to build the relationship and make sure your invoice stays front of mind.

77. Say thank You

We all like to feel appreciated so a little thank you for a payment can go a long way to creating good will and god relationships with your customers.

78. Join Your Sales Team on Customer Meetings

Get to understand your sales team’s processes and priorities and give them the opportunity to understand yours.

79. Create Good Internal Communications

Ensure the sales team are made aware of credit and cash flow decisions that affect them, such as stop lists and credit warnings, and that credit team are made aware of sales decisions such as promotions, significant pipeline deals and price changes.


You ned to know if what you’re doing is having a positive impact. You can’t do that if you don’t track your progress.

80. Know What’s Normal for Your Sector

Look at the average debtor days for your industry. How does your business compare? This can help you see if your processes are effective and your efforts justified.

81. Be prepared to make changes

If things are not improving review your processes again. What’s working? What’s having little effect? Try something different and measure it’s impact.

82. Know Your KPIs

What measure do you want to use to track progress? Query volumes? Call volumes? Debtor days? Pick those that are most relevant to your business.

83. Set Targets

Now you have decided on your KPIs you need to set targets for them. Check progress regularly and review why any have not been met. Don’t forget to clebrate your achievemets too!


Suppliers are the other side of the cash flow equation and it’s important to invest time in managing and nurturing them too.

84. Always know Who You Owe Money To

Log all invoices as soon as you received them, and use that log to track what you owe, to whom and when.

85. Don’t pay Suppliers Early

Pay on the due date. Keep the money in your bank account as long as possible to support your busines and allow you to deal with any unexpected expenses in the meantime.

86. Do Pay Suppliers on Time

Late payments to supplier can have a negative impact on your credit core. This can lead to support reducing or even withdrawing credit term and credit limits.

87. Talk to Your Suppliers

If you can see a cash flow gap ahead that means you won’t be able to make a payment when it’s due, talk to your supplier in advance of that happening. Open and honest communication preserves and improves relationships.

88. Review Your Expenses Regularly

Are they all necessary? Are you still paying a monthly subscription for something you’re no longer using?

89. Benchmark Suppliers

Regularly compare current suppliers against a series of criteria, such as customer service, delivery, documentation, values etc, to ensure you’re getting the best value and service possible.


Many people believe if their business has money in the bank then they must be doing OK. However, unless you have a firm grasp of your business’ cash flow you will not be able to make decisions about the future; long-term or short-term.

90. Prepare a Cash Flow Forecast

A cash flow forecast tells you where your money is, and when it will be needed. Keep it simple.

91. Update Your Cashflow Forecast

Keep your forecast up to date with anything that could impact your cash flow, including late payments, price changes and unplanned spending. This will help you identify any cash shortages before they happen.

92. Have A Contingency Plan for Cash Flow Gaps

Know what your options are for managing a short-term cash shortage, such as an overdraft facility or investing personal savings.

93. Review and Maintain Your Cash Buffer

How many days, weeks, months, can your business survive without any income? Most experts recommend you have enough cash in hand in your business to cover at least 6 months’ worth of expenses, ideally a full year. This is particularly important for seasonal businesses.

94. Don’t spend the money before you’ve got it!

It’s tempting to anticipate the receipt of a payment and make spending decisions accordingly, but unless the money is in your bank account, and the cash flow forecast says you have a good buffer, don’t spend it.

95. Don’t Put All Your Eggs In One Basket!

Having a wide customer base mitigates the risk of over reliance on one or two larger customers and the impact that can have on your cash flow. It also gives you the freedom to say no to clients who won’t agree to your terms.

96. Consider Credit Insurance

Credit insurance protects the policyholder in the event of a customer becoming insolvent or failing to pay its trade credit debts. It is not a substitute for good credit control practices but a safeguard for your cash flow.


Never stop learning or looking for ways to improve, even if improvement means admitting you can’t do it all, or know it all, and you engage others to plug the skills gap.

97. Hire a Dedicated Credit Controller

If you have the volumes to justify it, hiring someone with the specific skills for credit control is a great investment. It ensures that the person responsible for the job is capable and gets results.

98. Consider Outsourcing

If you don’t have the time resource in house to do your credit control consistently, and don’t have the volumes to justify hiring a dedicated credit controller, consider outsourcing it to trained professionals.

99. Ask an Expert

Got a problem with a late paying customer? It’s tempting to ask Social Media for advice on what to do but the advice you get may not be up to date or applicable for your situation. Always ask a credit management expert.

99. Update Your technology

Systems and Apps are constantly evolving, and many processes could be automated to save time and speed up the collection process.

100. Streamline Business Processes

Simplify or eliminate unnecessary work-related tasks to improve efficiency. A streamlined process means fewer errors and delay.

101. Subscribe to Our Mailing List

Subscribe to Confident Cashflow’s mailing list here to get useful content, resources, and tips direct to your inbox.

How Many of These Do You Already Do?

If these tips are not new to you, and you’re putting that knowledge into practice, then well done, you’re on track for healthy cash flow.

If not, and it seems like an awful lot of work to do, book a call with Confident Cashflow to see how we can help. We can do it for you, with your or give you the necessary skills for you to get it done.

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