Cash flow is king: how to avoid turning over money you never see

Profit is an accounting figure; money in the bank is what pays your bills. Growing businesses feel this the hardest: every new order consumes working capital before the customer has paid. That is why a cash flow forecast matters more to a growing business than the profit and loss statement.

The core of a good cash flow forecast is simple: line up all expected income and expenses per week or month, including VAT payments, payroll and fixed costs. That way you see well in advance when the balance gets thin — and can act before it becomes a problem.

Practical measures that help immediately:

• Invoice right after delivery, not at the end of the month

• Use a 14-day payment term instead of 30 where you can

• Send an automatic payment reminder when invoices expire

• Spread large expenses: leasing equipment is often better than one big outflow

• Put the monthly VAT payment aside in a savings account

• Watch your debtors: more than 60 days unpaid is a serious signal

In practice we see that entrepreneurs who review their figures monthly spot problems weeks earlier than those who only look at year-end statements. With monthly or quarterly figures from your administration — a service we offer as standard — you steer on facts instead of gut feeling.