Mastering cash flow, essential strategies for small business success

December 10, 2024

At TS Bank, we know small businesses are the heart of our communities. Your passion, hard work and dreams drive not only your business but the local economy. That’s why we’re here to help you succeed.

Managing cash flow is one of the biggest challenges small businesses face, but it’s also one of the most important. With thoughtful planning and a few smart strategies, you can keep your business financially healthy and ready to grow—whether you’re navigating seasonal ups and downs or planning for your next big opportunity.

Here are some practical tips to help you manage your cash flow effectively.

Know your numbers

At the core of every successful business is a clear understanding of cash flow. Tracking what comes in and what goes out is essential, and it doesn’t have to be complicated.

Track cash flow regularly: Set aside time each week to review your income and expenses. Tools like accounting software or even a simple spreadsheet can work wonders.

Focus on timing: It’s not just about how much money you have but when it’s available. Understanding your cash flow cycles helps you plan better.

Create a cash flow forecast

Planning ahead is essential. A cash flow forecast lets you predict when your business might experience tight cash flow and helps you prepare.

Use historical data: Use past numbers to estimate future income and expenses.

Update regularly: Keep your forecast dynamic—adjust it as new opportunities or challenges arise.

Look ahead: Plan for seasonal slowdowns or inventory restocking, so you’re never caught off guard. And, if you need a line of credit to help cover short-term financing, we can help with that too!

Build a budget

A budget can sometimes feel restrictive but use it more as a roadmap to your goals. A good budget helps you prioritize what’s most important while ensuring you’re not overspending.

Separate wants and needs: Payroll, rent and inventory should always take priority.

Include a safety cushion: Save a portion of your revenue for emergencies or unexpected opportunities.

Master receivables and payables

Cash flow struggles often come from timing mismatches between receivables and payables. Tighten up both sides to improve your business’s cash position. Plus, our cash management services can make a huge impact on businesses of any size, helping you save time and streamline your financial operations.

Receivables tip: Send invoices promptly and offer incentives for early payments.

Payables tip: Negotiate longer payment terms with vendors or suppliers (when appropriate), giving you more flexibility.

Plan for seasonality

Small businesses, especially retail or agriculture-based ones, often face seasonal cash flow fluctuations. Planning ahead can make those quieter months less stressful.

Busy season opportunities: Build up reserves during peak periods to cover expenses in slower months.

Off-season offerings: Diversify your services or run specials to attract customers year-round.

Keep financing options open

Even the best-planned businesses sometimes need extra cash flow support. TS Bank is here to ensure you’re prepared for those moments.

Consider a line of credit: A line of credit provides peace of mind for covering short-term gaps. Build a relationship with your banker or lender early, so when you need financing, you’re ready to go. We would love to partner with you!

Simplify your work

At TS Bank, we believe in working smarter, not harder. That’s why we recommend leveraging technology to take some of the weight off your shoulders.

Cash flow software: Use tools to monitor your cash flow in real time and make smarter decisions.

Automated payments: Save time and reduce errors by automating repetitive tasks. Digital payment options can also encourage faster transactions.

With a little planning, the right tools and a supportive banking partner, you can confidently steer your business toward growth and success.

Whether you need help setting up a cash flow strategy, exploring financing options or simply want a partner to brainstorm your next move. At TS Bank, we’re more than just your bank—we are here for you. Stop by one of our local branches or give us a call today at 844-487-3030. We would love to help you continue your business goals and success!

At TS Bank, we IGNITE PROSPERITY® by helping our clients do more with their money. Whether it’s saving a little extra cash each month or accomplishing a long-term strategy, our goal is to help you transform your financial life. Call and schedule an appointment today, one of our team members would love to help you do more with your money at TS Bank. TS Bank has eight locations in central and southwest Iowa. For more information visit tsbank.com or call 844-487-3030. #igniteprosperity