How to Manage Cash Flow: Tips for Small Businesses

Cash flow is one of the most common challenges facing UK businesses — and one of the main reasons many struggle or fail in their early years.

At Skyrock Accountants, we often see businesses that are profitable on paper but still under pressure because cash isn’t coming in at the right time. Managing cash flow well isn’t about complex spreadsheets — it’s about visibility, discipline, and forward planning.

Here’s how to manage cash flow properly and keep your business in control.

What Is Cash Flow (and Why It Matters)?

Cash flow is simply the movement of money in and out of your business. simply : income and expenditure of your business

You can make sales, issue invoices, and still run into trouble if:

• Customers pay late

• Expenses increase unexpectedly

• Tax bills aren’t planned for

  
  

Cash flow problems usually build quietly — until they suddenly become urgent.

1. Know Your Numbers (Regularly)

One of the biggest mistakes we see is business owners relying on annual accounts to understand performance.

By the time year-end accounts are prepared, the information is already out of date.

To manage cash flow properly, you need:

• Up-to-date bookkeeping

• A clear view of income and expenses

• Regular reviews, not once a year

  
  

👉 This is where our Bookkeeping Services and Management Accountancy Services help business owners stay informed.

2. Invoice Promptly and Clearly

Late invoicing = late cash.

Simple improvements can make a big difference:

• Invoice as soon as the work is done

• Use clear payment terms

• Follow up unpaid invoices consistently

• Make it easy for customers to pay e.g sent payment links

  
  

Many cash flow issues are caused not by lack of sales, but by slow collections.

3. Separate Profit from Cash

Profit does not equal cash.

Common examples:

• VAT collected isn’t yours — it belongs to HMRC

• Large expenses paid upfront reduce available cash

• Debtors inflate profits but don’t pay the bills

  
  

Understanding this difference helps you avoid spending money that isn’t really available.

4. Plan for Tax and VAT Early

Unexpected tax bills are a major source of cash flow stress.

Good cash flow management means:

• Setting aside money for Corporation Tax or Income Tax

• Planning for VAT payments

• Avoiding last-minute scrambles

At Skyrock, we help clients forecast tax liabilities early, so there are no nasty surprises.

5. Prepare a Simple Cash Flow Forecast

You don’t need a complicated model.

A basic forecast showing:

• Expected income

• Regular expenses

• Tax and VAT payments

  
  

can give you early warning of pressure points.

Even a simple 3–6 month forecast can help you make better decisions about spending, hiring, or investment.

👉 Our Outsourced FD Services support businesses that want this level of insight

without a full-time finance director.

6. Control Costs (Especially in Early Stages)

As businesses grow, costs tend to creep up:

• Subscriptions

• Software

• Marketing spend

• Staffing

  
  

Regular reviews help ensure costs are still justified and affordable.

Cash flow improves just as much from controlling outgoings as it does from increasing sales.

How Skyrock Accountants Help with Cash Flow

At Skyrock Accountants, we don’t just prepare accounts — we help business owners understand and manage their numbers.

We support cash flow by:

• Keeping your records up to date

• Providing clear management accounts

• Helping you plan for tax and VAT

• Acting as a sounding board for financial decisions

• Offering fixed fees, so your costs are predictable

Final Thoughts

Most cash flow problems are avoidable with the right systems and support in place.

Managing cash flow isn’t about being perfect — it’s about being informed and proactive.

If you want clearer control of your business finances, Skyrock Accountants are here to help.

👉 Contact us today via our Contact page for a no-obligation chat about your business.

Contact us not for your free review