Protecting Your Cashflow

Speed up your CCC cycle

Your CCC measures the number of days it takes to turn what you spend producing goods or services into revenue. A shorter CCC means you’re managing cash more efficiently. The length of time varies, for example the cash cycle for a café is the time from paying for supplies (e.g. coffee beans) and banking the cash from a customer, 2-3 week. It’s much longer for a manufacturing business using raw materials with a long completion date, for example 2-3 months.

Regardless of your individual circumstances, always try and shorten it.

Invoice immediately when work is done, not at the end of the month. Use automated reminders, online payment options, and incentives for early payment. Even shaving a few days off receivables improves cash flow significantly.

Negotiate better payment terms with suppliers or align payments with when you get paid. Extending payables, without damaging relationships, eases pressure on cash.

Reduce excess inventory by tracking what sells fastest and avoid over-ordering slow movers. Use just-in-time purchasing, smaller but more frequent orders, or drop-shipping arrangements where possible. Leaner inventory shortens the time between paying for stock and converting it into sales.

Accurate forecasting avoids overproduction and over-purchasing as the better you predict demand, the faster your cycle runs. Use past sales data, seasonal patterns, and customer feedback to order and produce only what’s needed.

Streamline operations and delivery as the quicker you can deliver, the sooner you can invoice and collect. Look at production bottlenecks, staff scheduling, or delivery methods. Even process improvements like digitizing paperwork or cutting approval layers reduce delays.

Offer convenient payment options to customers to make it easy for them to pay promptly. Online payment gateways, mobile card readers, or pay now buttons on digital invoices can accelerate cash collection. For larger invoices, consider requesting partial upfront deposits.

Even small adjustments in these areas can make a noticeable difference to your cash position, helping you maintain stability and reinvest with confidence.

Forecast cash flow ahead

A cash flow forecast is a snapshot of your expected liquidity at a point in time. By tracking incoming funds against expenses, you can see whether your balance will be positive or negative in the months ahead.

If the forecast shows a potential shortfall, you can act early, whether by adjusting supplier terms, driving extra sales, or arranging finance.

How to create a cash flow forecast

Download our cash flow forecasting template* or use your accounting software to track inflows and outflows.

Steps to build a forecast:

• Decide on your forecast period, i.e., yearly, quarterly, or monthly.
• Record your opening balance.
• Estimate incoming payments such as product or service sales, investment income, or any asset sales.
• Estimate outgoing cash, including supplier payments, rent or lease costs, wages and salaries, taxes, utilities and bills, loan repayments and any other liabilities and expenses Subtract total outflows from total inflows to get your closing balance.

If you’re new to forecasting, start simple. Estimate your monthly outgoings, then calculate the sales needed to cover them. Over time, your forecasts will become more accurate as you compare past predictions with actual results.

Refining your forecasts

Looking back at earlier forecasts can be just as useful as creating new ones. Identify where your predictions were accurate and where they fell short. For example:

• Did unexpected costs crop up?
• Did sales come in lower than expected?
• Were you relying on incomplete data?

When you fine-tune your assumptions, your forecasts will become a more powerful planning tool.

Planning for shortfalls

Sometimes forecasts will show a gap between when money goes out and when it comes in. The type of finance you use depends on the size and duration of that gap.

• If you’re looking at short-term gaps, take a moment to review our business credit card options and how they can help you manage timing issues and keep essential payments on track.
• For medium or long-term gaps, check out how our business loan solutions can provide stability for larger funding needs.
• When you need flexible cover, we can provide a business overdraft to give you access to extra funds when you need them, with the freedom to repay when cash flow improves.

When you plan for potential shortfalls in advance, you can maintain stability, avoid costly interruptions, and ensure your business stays on track even when cash flow timing is tight.

Funding options to support cash flow

Managing cash flow is easier with the right financial tools. We offer solutions designed to give you flexibility and confidence in your day-to-day operations.

• Our business card solutions can help you manage your expenses, giving you better flexibility with your payments and cashflow.
• Whether you’re buying, managing or growing your business, a business loan could help you get there.
• Whatever business you’re in, we have a range of payment solutions to make payment acceptance quick, easy and convenient.

Together, these options can help you stay on top of day-to-day expenses, manage seasonal fluctuations, and create a stronger foundation for growth.

Next steps

• Take action to improve your cash conversion cycle.
• Create a cash flow forecast for the next three to six months.
• Compare past forecasts with actual results to refine your accuracy.
• Explore our business banking services to find the right tools for managing your cash.

*These resources are guides only and should neither replace competent advice, nor be taken or relied upon as financial or professional advice.