Paying suppliers late
Bills are paid when cash allows rather than when they are due.
Why Cash Flow Matters
Profitable on Paper, Short of Cash in the Bank?
Plenty of healthy, profitable businesses still run into trouble because cash arrives later than it leaves. Late-paying customers, seasonal dips, VAT bills and growth all put pressure on your bank balance.
The good news: most cash gaps can be seen weeks in advance. These eight tips are grouped into three areas — getting paid faster, controlling what goes out and looking ahead.
6 min read
8 tips in 3 areas
Illustrative example
13-Week Cash View
In Out
Weeks 4 and 10: cash gaps spotted in advance
Warning Signs
Does Any of This Sound Familiar?
If you recognise two or more of these, the tips below are for you.
Profitable but cash-poor
The accounts show a profit, yet the bank balance is always tight.
Relying on the overdraft
The overdraft has become a permanent part of running the business.
Seasonal surprises
Quiet months catch you out even though they happen every year.
VAT and tax bills hurt
Quarterly VAT or tax payments arrive as an unwelcome shock.
Growing too fast
New orders need stock or staff before customers have paid you.
The 8 Tips
Three Areas to Steadier Cash Flow
Get Paid Faster
The quickest cash flow win is shortening the gap between doing the work and receiving the money.
- 1Invoice immediatelySend invoices the day work is completed — every day of delay is a day added to your wait.
- 2Set clear terms and take depositsState payment terms on every quote and invoice, and ask for deposits on larger jobs.
- 3Follow up consistentlySend a friendly reminder before the due date and follow up promptly when payments are late.
Control What Goes Out
Matching outgoings to incomings is often easier than you think — and costs nothing.
- 4Align supplier termsWhere possible, agree supplier payment dates that fall after your customers usually pay you.
- 5Review recurring costs quarterlySubscriptions and direct debits creep up. Cancel what you no longer use and renegotiate the rest.
Look Ahead
A simple forward view turns cash surprises into decisions you can plan for.
- 6Keep a 13-week rolling forecastUpdate expected receipts and payments weekly so gaps appear on screen weeks before they reach your bank.
- 7Ring-fence VAT and taxMove a set share of each payment into a separate account so large bills are already covered.
- 8Build a cash bufferA reserve for a few months of fixed costs gives you time to respond calmly to the unexpected.
Quick Reference
Cash Flow Actions at a Glance
| Area | What to do | Why it helps |
|---|---|---|
| Invoicing | Invoice on completion with clear terms | Shortens the time until you are paid |
| Credit control | Polite reminders before and after due dates | Fewer late payments and awkward chases |
| Suppliers | Match payment dates to your cash cycle | Money leaves after it arrives |
| Overheads | Quarterly review of recurring costs | Stops small leaks adding up |
| Forecasting | Weekly update of a 13-week forecast | Early warning of potential gaps |
| Provisions | Separate account for VAT and tax | No more unexpected bills |
Revenue is vanity, profit is sanity, but cash is reality.
A well-known business saying0Week forecast window
0Areas to focus on
0Practical tips
This article is general information to help you think about your business finances. It is not regulated financial, tax or legal advice. For decisions specific to your situation, speak to a suitably qualified professional. See our Disclaimer.
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