52 tips on how to increase your cash flow

Higher revenue, lower expenses, and more cash in the bank: that’s what every business hopes for. This is the central task when it comes to increasing cash flow. But not every measure fits every business model. Finding the right levers is key. Here are 52 tips across 15 categories to improve your cash flow.

Realize revenue faster

What’s the goal? Your customers should pay faster so money arrives in your account sooner and is available to you. Improved invoice management helps with this – and strengthens your cash flow.

1. Send invoices faster: Don’t wait until the end of the month. You can send invoices immediately after delivery or service. This ensures that invoices can be paid promptly.

2. Shorten payment terms: You can reduce the payment terms from 30 or 60 days to 10 or 14 days. This brings money into your business more quickly, improving your cash flow. However, this step must be communicated clearly beforehand. The other party will try to delay payments for as long as possible to improve their own cash flow.

3. Offer discounts for early payment: “2% discount for payment within 7 days” – such measures can motivate customers to pay quickly. Your cash flow benefits from this.

4. Require deposits or partial payments: For large projects with high invoice amounts, you can request a portion of the sum upfront or arrange to receive the total sum in installments when certain milestones you’ve completed are reached.

5. Use factoring: You can sell outstanding invoices to a factoring company to instantly boost your cash flow.

6. Digitize accounting: With the help of software, you can make accounting processes more efficient. Invoices are created, sent, and tracked in real time.

Effective accounts receivable management for cash flow increase

What is the goal? You need to consistently follow up on outstanding invoices so that customers don’t pay late or fail to pay altogether. This strains your cash flow and should be avoided at all costs.

7. Set up automatic payment reminders: Tools like accounts receivable software help send reminders on time. Ideally, the software automatically sends reminders to overdue customers.

8. Define clear reminder processes: Send the first reminder after 7 days, the second after 14 days, and the final reminder after 21 days – with consequences. This ensures invoices get paid.

9. Minimize invoice defaults: You can perform a credit check before signing contracts to avoid customers with poor payment histories. This ensures that invoices will be settled.

10. Offer flexible payment options: Direct debit, credit card, PayPal, Google or Apple Pay – offer your customers multiple ways to pay you. This speeds up the payment process and improves your cash flow.

11. Prompt customers to renew expired credit cards: You can remind customers in advance when a credit card is about to expire, preventing delays.

12. Introduce automatic direct debits: This approach prevents late payments due to forgotten invoices.

Cost reduction, elimination, or pausing

What is the goal? You minimize your costs and unnecessary expenses without jeopardizing quality or growth. When done correctly, it can be a direct path to increasing your cash flow.

13. Negotiate better terms with suppliers: Long-term contracts with business partners and suppliers are important. They ensure stable prices, and you can secure better payment terms. You can take advantage of volume discounts to extend payment terms or seek cheaper suppliers to reduce costs. Or, you can incorporate contract clauses for flexible adjustments that compensate for price fluctuations or allow for renegotiations.

14. Review unnecessary subscriptions and ongoing costs: Regularly question your software, licenses, or services and review the contracts. What you don't need, you can cancel. This will relieve your cash flow.

15. Optimize inventory levels: Too much inventory ties up capital. Therefore, consider optimizing your stock management. A stock analysis can help ensure you don't have either too many excess items (unused capital) or shortages (expensive rush orders). For example, you can sell slow-moving stock faster with discount promotions. Just-in-time orders can help reduce inventory. This is particularly helpful for businesses with high material costs. You should also prefer suppliers with short delivery times, as this can reduce your inventory levels.

16. Reduce rent and operating costs: COVID-19 sparked this shift: You can assess whether you can downsize your office space, promote remote work more actively, or implement energy efficiency measures. If your office is only half-occupied, you can reduce costs this way and improve your cash flow.

Business model development

What’s the goal? You increase your revenue and improve profitability. Both directly positively impact your cash flow.

17. Adjust pricing strategy: Prices are the most effective yet also the most sensitive lever to increase your cash flow. You should regularly review your prices and adjust them according to the market and inflation. If you improve your product or service, that can also be a good reason for price adjustments.

18. Focus on high-margin products or services: Which of your offerings have the best contribution margins? Promote them strategically to improve your cash flow.

19. Build subscription or recurring revenues: Instead of one-time sales, you can establish long-term customer relationships through service contracts, SaaS, or membership models.

20. Use upselling & cross-selling: Acquiring customers for the first time is the hardest – however, upselling and cross-selling are good strategies to offer them additional or higher-value products afterward.

Smart funding

What is the goal? Working capital and short-term financing are key levers to increase cash flow. They help you bridge cash flow gaps and stabilize your cash balance.

21. Use supplier credits: Consider negotiating longer payment terms (60-90 days) with your suppliers. This allows you to keep your money in the business for a longer period.

22. Use working capital financing: Improve your cash flow in the short term and bridge gaps with working capital. It comes in various forms, including overdraft or credit lines, factoring or the assignment of receivables, inventory financing, or short-term loans (less than 12 months).

23. Explore alternative financing: Flexible financing models, like those from re:cap, are often more cash flow-friendly than traditional business loans. You can tailor them to your needs and, with liquidity planning, know when you'll need additional funds.

Digitize and automate cash flow processes

What is the goal? You can specifically improve your cash flow by introducing time and cost savings through more efficient processes.

24. Automate accounting: Evaluate software solutions for pre-accounting, invoices, reminders, and tax calculations. They take a large part of repetitive tasks off your hands. With re:cap, for example, you can automate your preliminary accounting and save time.

25. Simplify payment processing: Consider digital payment providers like Stripe or GoCardless. They enable automated debits.

26. Optimize working hours: You can reduce or replace many manual processes with software tools. They handle recurring tasks automatically, giving you valuable time that you can use more profitably.

Leverage dynamic pricing

What is the goal? Prices can be adjusted based on demand and market conditions to boost your revenue and, in turn, your cash flow.

27. Avoid discounts when demand is high: This way, you don’t offer unnecessary price reductions during peak periods.

28. Offer premium prices for fast delivery or exclusive services: Customers often pay more for faster processing. Amazon Prime sets the example.

29. Introduce regional or seasonal price adjustments: You can raise prices during high-demand periods or in high-revenue markets.

Eliminate unnecessary services or products

What is the goal? Take a close look at your products and offerings. Identify your revenue drivers, where your margins are low, or what your customers can do without. Eliminate anything that isn’t profitable or absolutely necessary.

30. Review products and services with low margins: What isn’t selling well or provides little contribution margin? Offer products that strengthen your cash flow, not strain it.

31. Reconsider unprofitable customer relationships: Target customers who only generate costs, either sorting them out or transitioning them to more profitable offerings.

32. Streamline production and delivery processes: Look at your processes and eliminate unnecessary or inefficient steps.

Use outsourcing strategically

What is the goal? Consider whether you can outsource expensive internal processes to more affordable providers.

33. Outsource accounting and tax consulting: Both require a lot of expertise – you can buy this expertise externally and avoid spending time and costs on an internal solution.

34. Outsource IT and development tasks to more affordable countries: Nearshoring can lower your costs and help improve your cash flow.

35. Use temporary specialists instead of permanent hires: You can employ freelancers for project-based work instead of hiring expensive full-time staff.

Maximizing tax benefits

What is the goal? By optimizing your tax burden, you avoid paying more taxes than necessary, while preserving your cash flow.

36. Plan investments strategically: Use depreciation to its full advantage to reduce your tax burden. Check whether special depreciation or investment deduction options are available to you.

37. Create provisions: You can anticipate certain costs for tax purposes. Provisions for potential liabilities or future investments can help distribute your tax burden.

38. Check for grants and subsidies: There are various government aids or subsidies for innovations or environmental initiatives. Research regional and national programs, tax-free grants, or discounted loans.

Monetizing collaboration with partners

What is the goal? Generate additional revenue through partnerships.

39. Set up affiliate programs: Pay commissions for referrals – and use partner programs yourself. Choose partners with a large reach and offer attractive compensation models.

40. Co-branding with other companies: Collaborate with others to reach new customer groups. This way, you can leverage synergies to share marketing costs and increase brand awareness.

41. Renting or subletting space: Rent out unused office spaces or storage rooms to third parties. Offer short- or long-term rental models and target companies or freelancers looking for flexible solutions.

Speed up sales processes

What’s the goal? Waste less time between the offer and receiving payment.

42. Shorten purchase processes with digital contracts: Stop sending contract documents by mail. It takes too long and can cause delays. Use electronic signatures (e.g., DocuSign) instead of paper contracts.

43. Create instant quotes with an AI-powered configurator: Make closing the deal and onboarding customers as easy as possible, with no manual effort or intervention on your part.

44. Enable one-click payments: Especially in e-commerce, it’s crucial to make the checkout and payment process as simple as possible. This way, the money lands in your account faster –increasing your cash flow.

Increase customer retention to secure regular revenue

What’s the goal? Encourage existing customers to make repeat purchases.

45. Introduce loyalty programs: Offer your loyal customers points, discounts, or exclusive deals. This helps keep them engaged with your brand longer.

46. Conduct regular customer check-ins: Depending on your business and industry, personal customer care plays a crucial role. It increases the repurchase rate.

47. Utilize contractual minimum terms: Offer your customers more affordable annual contracts instead of monthly ones. This strengthens your cash flow in the long term, as it provides greater financial predictability.

Leverage mobile and expand in international markets

What’s the goal? When you’ve exhausted the usual avenues: win customers through new sales channels.

48. Expand e-commerce or digital products: They open the door to global markets and offer revenue opportunities worldwide.

49. Offer international payment methods: As mentioned above, you should provide your customers with various payment methods that work across borders.

50. Use mobile-first strategies: With mobile-optimized shops and apps, you typically achieve significantly higher conversions.

Implement smart liquidity management

What’s the goal? Liquidity management increases cash flow by optimizing capital flows, avoiding bottlenecks, and efficiently utilizing unused funds.

51. Better cash flow forecasting: With an accurate cash flow forecast, you’ll know exactly how your financial flow will evolve in the coming weeks and months. A useful tool is the 13-week cash flow forecast. This allows you to spot potential bottlenecks early and take action in time. You can keep track of all revenues and expenses and adjust your financial planning accordingly.

With re:cap, you get a cash flow analysis tailored to your needs – combining historical data with real-time insights. Customize your cash flow statement, break it down by teams and projects, and gain a granular view of your cash position. Stay ahead with clarity and control.

52. Use cash flow software: Cash flow software is a valuable tool to help you stay on top of your finances and increase your cash flow. It provides a clear overview of all income and expenses – in real time. This allows you to immediately identify potential weaknesses and address them proactively.

The software shows you exactly where costs are occurring within your business and whether you’re staying within budget. Not only can you efficiently plan your cash flow, but you can also uncover gaps that you need to finance.

Why you should increase cash flow

Having a healthy cash flow – and actively improving and increasing it – is essential for every business. Here are the key benefits:

1. Secure financial stability and liquidity

Why is this important? Businesses need enough liquid assets to cover ongoing costs.

• Pay rent, salaries, and bills on time: This prevents late fees and loss of trust.
• No reliance on short-term loans: This eliminates interest and fees for emergency loans.
• Create financial room for unexpected costs, such as repairs or back payments.

2. Enable growth and investments

Why is this important? Businesses with strong cash flow can invest strategically in growth.

• Expand into new markets, such as international expansion or new sales channels.
• Invest in technology or automation: This reduces costs in the long term and increases efficiency.
• Hire new talent, accelerating the acquisition of skilled professionals.

3. Independence from external funding

Why is this important? By optimizing cash flow, you need fewer loans from banks or financing from investors.

• Avoid interest and fees: This increases profitability.
• No loss of control through investors: Those who don’t dilute their shares retain control and independence.
• Better loan terms through higher liquidity: If a loan is necessary, you’ll get better interest rates.

4. Better negotiating position with suppliers and customers

Why is this important? Businesses with strong cash flow can negotiate better terms strategically.

• Take advantage of discounts and rebates: Those who can pay quickly often get better prices.
• Negotiate supplier contracts on your terms, such as longer payment periods.
• Offer more attractive payment terms to customers, such as installment plans or flexible models.

5. Increase crisis resilience

Why is this important? Economic fluctuations, market crises, or sales declines are easier to weather.

• Build a buffer for tough times, such as downturns in sales, rising costs, or new tariffs.
• Shorter response times to market changes, such as quickly reacting to new trends or regulations.
• Mitigate supply chain issues. Companies can finance alternative suppliers or larger inventory themselves.

6. Higher valuation and attractiveness for investors

Why is this important? Positive cash management increases the company’s value.

• Investors prefer companies with strong cash flow because they face less risk.
• Higher company valuation, providing a better starting point for a sale or IPO.
• More attractive for strategic partnerships: Companies with stable liquidity are seen as reliable.

7. More flexibility for business decisions

Why is this important? Financial freedom allows you to seize opportunities instead of only reacting to problems.

• Make quick decisions without waiting for financing approvals.
• Test new projects or products without significant risk.
• Act independently of external factors, such as not needing to pass on price increases.

Conclusion: stable cash flow for more security and independence

A high cash flow means security, growth, and independence. Businesses with good cash flow have more room to maneuver, can invest more wisely, and are more resilient to crises. By actively increasing your cash flow, you not only make the business more stable but also more successful.

The key is a mix of faster payment receipts, smart cost control, more efficient processes, and new revenue sources. Which measures should be implemented first depends on the individual situation – but each one brings more financial flexibility.