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“Cash is king” or so the saying goes. Even though your business may be profitable on paper, what matters is whether you have the pounds and pence in your business to pay staff and suppliers.
Many UK businesses fail to refuel their cash reserves – and are running on fumes. The latest figures from the Office for National Statistics show that one in six had no cash reserves as of the end of June 2025.
If customers pay you late, you settle invoices too early, or costs increase before you have the chance to raise prices, precious cash may be in short supply. We have asked the experts for their tips on maximising cashflow, so you can worry less and grow faster.
If you don’t know your numbers, you’re already in trouble, according to Carl Reader, serial entrepreneur, accountant, business adviser, and author of business bestseller Boss It. “Cashflow isn’t a problem until one day you can’t make payroll,” he says. “You need to invest in some kind of reporting, whether that is software or an accountant, to help you understand your cash trajectory.” By projecting the numbers forward, you’ll be able to see the best-case scenario and the worst case. “Make sure you have a plan in place for the worst case,” Reader adds, “and then you are protected against all eventualities.”
Late payments are the scourge of business. Industry body the Federation of Small Businesses found that late payments are the root cause of cashflow problems for 37% of small firms. It is estimated that is why 50,000 UK businesses go bankrupt every year. “Tighten your terms, invoice early, and automate reminders,” says Dwain Reid, former government adviser on entrepreneurship and a business coach who specialises in helping underrepresented founders. “Can you take part of your payment upfront?” he asks. “You’ll be surprised how often the answer is yes. Even 30% upfront shifts your cash position and signals confidence.”
Payment terms can make or break a business. In the UK, standard payment terms stand at 30 days but this won’t always be the case when trading with international organisations. Don’t be afraid to negotiate, says Julie Wong, fractional finance director, growth strategist and British Library business mentor. “Ensure credit terms with suppliers are not shorter than the payment terms you offer customers,” she says. “That causes a negative impact on the cash cycle.”
Don’t forget first principles: making customers happy is great for cashflow. Katie Lynch is the founder of Bohomoon, a sweat-proof and tarnish-free British jewellery brand. She started the business with £500 and has grown it to a turnover of £13 million without any outside investment. She explains: “Having a quality product has led to Bohomoon having a loyal customer base that returns time and time again.” Not only are there few returns AKA refunds, but word-of-mouth recommendations are the cheapest PR there is. “We save on marketing costs by not having to pay to acquire new customers,” she says.
“Over the years, I’ve seen brilliant tech businesses fail because they didn’t manage cash properly,” says Martin Port, serial entrepreneur and CEO of Leeds-based startup Build Concierge. His AI-powered customer engagement platform is built on a subscription model. “Recurring revenue smooths cashflow, improves forecasting, and builds stickier customer relationships,” he explains.
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How credit-worthy is that new customer? Business owners with great cashflow always do their due diligence, says Wong. “Before selling or offering any credit to clients, check they are credit worthy. This should be embedded in the on-boarding process of clients.”
“Not all income is equal,” says coach Reid. “Prioritise offers that convert quickly and don’t drain your time.” Keep reviewing your products or services to focus on the best-sellers and the easy upsells, he advises, and give customers a reason to buy now, not later. “If you’re selling a physical product, set up a 10% discount or early access to a new drop, in exchange for an email or phone number. Then follow up with a timed offer.”
Every minute you spend chasing payments or issuing invoices is time you are not growing your business. “We’ve integrated tools that automatically follow up on overdue payments with friendly nudges,” says entrepreneur Port. “It removes friction, reduces awkwardness, and improves cash conversion. Manual chasing slows everything down.” As the boss of a tech business that automates quoting and chasing payments, customers expect Port to have slick automations in place, he adds. “We eat our own cooking – and cash comes in faster as a result.”
“You don’t need more revenue if you’re leaking margin,” says Reid. “Review software fees, subscriptions, and team inefficiencies.” He advises business owners to ask: ‘do we need this?’ every quarter. “Even trimming £100 a month from underused tools or duplicated effort adds up, especially if your margins are tight. Cashflow isn’t just about more sales. It’s about keeping what you earn.”
At Bohomoon, Lynch kept spending to a minimum so there was profit to reinvest into the business, keeping cash levels high. “I was the head of marketing/buying/socials and content myself for the first 10 years,” she explains. “I saved on staff costs and it allowed me to reinvest more money into the business. I only hired when absolutely necessary.”
“Review your funding platforms regularly to make sure you have access to capital,” says Reader. “You need to be look at different funding platforms, weighing up whether to take equity or debt, and analysing the cost of that capital.” Forewarned is forearmed: make sure you find the most competitive rates around, should you need to take external finance.
Most business cashflow problems arise from a lack of planning, a failure to collect debt, and a reluctance to increase prices or change terms when the need arises. Be bold, act quickly, automate and stay curious about your data and you’ll never worry about cashflow again.
