Keeping Cash Flow Smooth

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Small businesses often suffer from uneven cash flow, or “lumpy money” syndrome. But there are some steps you can take to smooth out your cash flow.

Don’t be afraid to ask for cash up front. A retainer or a down payment at the start of an order can give you the funds you need to operate smoothly.

Check out your customers carefully when you extend credit. Background and credit checks might not uncover potential problems if someone’s operating under a new name, so check their reputation online and with industry contacts too.

Accepting credit cards may cost you a processing fee, but it can beat waiting for the billing and payment cycle.

An automated accounting and invoicing system can take a lot of hassle out of invoicing and bill collecting.

And finally, if you have to tap your credit cards – as many startups do at some point – make sure it’s at least one that gives you rewards that can help your business.

Adapted from 5 Tips for a Smoother Small Business Cash Flow by Joe Taylor Jr. at Small Business Computing.


One effective way to check out your customers is to learn their patterns and spending behaviors. You can actually do that by investing some time to study your potential customers' data. You can map out the establishments near them, and other common habits. When these are already collated and analyzed, you can be assured to keep your cash flow smoothly.


In order to truly understand your cash flow, an important tool is to set up and constantly update a Cash Flow Projection. There is a simple way to set up your own cash flow with an excel cash flow template and information from your financial reports. Businesses that continually update their cash flow projection have a much higher rate to succeed.