How to keep your cash flow up to date

Blogs 17 Nov 2021

From chasing late payments to reviewing your cash position, learn the steps you can take to stay in control of your cash flow and where you can find additional support.

Whether it’s paying suppliers for goods and services or making sure there won’t be any issues with paying any employees at the end of the month, there’s nothing more important than cash flow to keep your small business healthy.

A major cause of headaches, for both businesses and individuals, is when customers, clients, or others don’t pay the money they owe. Despite letters and phone calls, they may fail to meet their financial obligations, leaving their creditors feeling frustrated and out of pocket. For many small businesses, this can make the difference between your business surviving or going under.

How can I stay on top of my business' finances?

  • Do you have sufficient finance available to meet any commitments when they are due?
  • Are you confident your finances will remain in a strong position for the foreseeable future?
  • Do you have, and update regularly, a cash flow forecast to ensure you stay within your financing facilities?
  • Are your major customers paying you promptly and not putting you under pressure to extend payment terms?
  • Is your product or service so vital to your customers that they will pay your invoices first if they have to choose who to pay?
  • Are you confident that your customers are not having financial difficulties that might make them pay you late, or not at all?
  • Are you implementing good credit management practice?

Make a plan

It’s always worth planning your cash flow requirements carefully, allowing for differences in the payment terms you receive from your suppliers and those you give to your customers. You should look to regularly update the cash flow forecasts to ensure you stay within your financing facilities. Monitor your plan as much as you can so you can spot any variances.


If you think you might have a cash flow problem, then make sure you talk to your bank immediately. The earlier you discuss this with them, the earlier they can assist you with what options are available to you.

If you can’t pay a supplier on the due date, talk to them as soon as you know you cannot do so. Again, earlier communication allows for all options to be explored and gives more of a degree of flexibility.  Don’t forget, early communication is key – if you avoid talking to suppliers, your bank, and other parties, you might find supplies or finance have been withdrawn or legal action has started and things will quickly escalate.

Getting paid

When it comes to getting back money that’s owed to you, ask yourself the following questions:

  • Is there likely to be a dispute about the amount of the debt?
  • Has the debtor got the means to pay?
  • Does the debtor have assets in the UK?
  • Are there other businesses or individuals who are overdue to pay you money? 
  • If so, why is that? 
  • Is the position getting better or worse? 
  • What do you do yourself to try and collect the money you’re owed? 

Try to collect the money you’re owed

You should always contact a person who owes you money that’s overdue – after all, they may simply have forgotten or been busy themselves with other tasks. You can ensure you have provided your customer with all the information they require in order to settle an outstanding invoice.

Don't forget, clear communication is often all it takes to settle an invoice, which is why late payment letters are so important to the debt recovery process.

Assess your current cash position

But what should you do if you still aren’t being paid yourself by the people you’ve worked for? 

The first step you should take as a business owner is to assess your current cash position. If there is a reason for non-payment, then whether it’s valid or not, you’re better to know sooner rather than later. You should phone for the best results but there’s nothing to stop you from sending letters and texts too.

If that doesn’t work, you need to think about what to do next. That means either:

  • writing off the debt, accepting you won’t be paid;
  • waiting longer, which rarely ends with the payment you want;
  • or involving a third party, either a debt collection business or a solicitors’ firm.

How can FSB help?

FSB Debt Recovery can help you recover money owed by giving you the tools and support you need to get paid. As a member, you can follow a simple step-by-step process, guided by experts. Download free guides, customise template letters, and get advice 24/7 from debt recovery specialists. If you need to take legal action, there are fixed fees and no hidden costs.

Take back control of your cash flow

It’s time to get the money you’re owed thanks to FSB Debt Recovery. Step-by-step guidance on chasing late payments, 24/7 support, free DIY template letters and clear, discounted legal costs.

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