Cash Flow & Funding

Profitable businesses can still run out of money. Cash flow is about the timing of money moving in and out of your bank account: when clients pay, when suppliers must be paid, and when tax bills fall due. The discipline is not complicated, but it must be consistent.

Start with a 13-week forecast

A 13-week rolling cash flow forecast is the most practical planning tool for a small business. List the cash you expect to receive each week, subtract known outgoings, and update it every Friday. It reveals a shortfall while there is still time to chase an invoice, defer a purchase, reduce costs or arrange funding.

Protect working capital

Working capital is the cash available to cover normal trading costs such as rent, wages, supplier bills and tax. Improve it by invoicing promptly, setting clear payment terms, chasing overdue invoices consistently, and building a separate reserve for Corporation Tax, VAT and Self Assessment rather than treating that money as spendable.

Funding options in context

The best funding route depends on what you are trying to finance. A short, predictable delay in customer payment may suit a cash reserve or carefully managed credit facility. Stock, equipment or a long-term growth project may require a different solution. Before applying for funding, establish the cash requirement, the repayment source, the expected return, and the worst-case downside if sales arrive later than planned.