17 Cash Flow Management Tips for Business Owners

By David Ferreira
TD Vice President, Commercial Banking

Maintaining a healthy cash flow—or what you take in for revenues and what you put out or spend on expenses—is important to your company's long-term growth and success. Here are a few tips to consider that might help you manage and improve your cash flow.

1. Optimize credit card processing

Getting credit card payments more quickly from TD Bank Merchant Solutions1 can help boost your cash flow. While some vendors can make you wait up to 3 days before receiving payments from your customers, TD offers next business day payments to a linked TD Small Business Checking Account.

2. Renegotiate payment terms

Often a vendor will require you to pay within 15 days (sometimes referred to as Net 15 or N15), which can make you strapped for cash mid-month and in the short term, as more money is going out than is coming in. If you could instead pay in 30 days (Net 30 or N30), you could be using that cash more effectively during that 15-day difference. Unless you'd save money by paying sooner, you should generally wait to pay.

3. Offer early pay discounts

If cash flow is an issue for your business, and slow accounts receivable is a contributing factor, consider offering your customers early pay discounts. By incentivizing your customers to pay early, you benefit by receiving early payments and improving your cash flow.

4. Automate the collection of receivables

Rather than waiting for paper checks to arrive in the mail, look for solutions like TD Online Accounting that can let you upload invoices and accept payments electronically—giving you all the benefits of having cash in hand sooner than later.

5. Maintain a business accounting system

One of the best ways to stay organized and on top of your business's current cash position is by using TD Online Accounting. This can be a low cost way to help you get paid faster, by allowing your customers to pay you via credit card or funds transfer. It can also help you save time and money by eliminating paper invoices.

6. Have a credit line for short term working capital

Consider TD Small Business Loans and Lines of Credit2 to provide your company with the necessary short-term working capital it needs to stay running smoothly while waiting on receivables or other sources of income. Also, by having a line of credit in place before you need it, means you can use it immediately or anytime the need arises. Considering applying for a business loan or line of credit? Check out our informative series of articles on how to find the right financing for your small business and how to get approved.

7. Use a cash back credit card for everyday purchases

Leverage your purchasing power by using a TD Business Solutions Credit Card and get cash back on everyday purchases. These rewards can be worth it when you make your payments on time.

8. Have trusted business advisors

Every business owner should have a good relationship with an accountant, attorney and a banker. For example, a TD Bank relationship manager can be one of the trusted advisors you rely on to make recommendations and to ensure your banking relationships are always optimized. Learn more about the pros and cons of working with a bank.

9. Use mobile check deposit or a check scanning machine

You can save time going to the bank by bringing the bank to you—and deposit checks right into your small business account with the TD Bank app. Or, for businesses with a high volume of checks, use TD Digital Express3, a desktop check scanner. To enroll, visit any TD Bank or call 1-855-278-8988 to learn more.

10. Use a credit reference service for new customers

When providing goods and services to newer customers, use a credit reference service to make sure they make their payments on time. A credit reference is used to determine a potential customer's credit worthiness, by obtaining references from their bank or other vendors they do business with.

11. Automate your payroll processing

By leveraging our Business Payroll and HR Services, you can automate many payroll, year-end and HR functions that will not only save time but money, too!

12. Keep your pricing current

Revisit your product and service pricing on a periodic basis to ensure they are in alignment with current market conditions, business costs and needs. The biggest reason a business will raise or lower prices is in response to competition. But price adjustments like lowering prices can increase cash flow and help reduce inventory that may be losing value or to make room for new inventory. Try our Cost Plus Pricing Calculator to see how the price you charge can impact business profitability.

13. Create and keep your business plan updated

A business plan is not only useful for starting a business, it's also a valuable tool for continually reevaluating your products, services and the market you do business in—and to help you keep tabs on the competition. Start by creating a business plan using our guide and template.

14. Look for bundled discounts when purchasing products or services for your business

When working with a business service provider, like a bank, be sure to take advantage of any discounts they may offer for using multiple services. When working with suppliers, purchasing in bulk or signing a longer-term deal may result in a better price. Just make sure you can use all you buy.

15. Keep relationships current and stay in touch

You should regularly keep in contact with your suppliers, service providers, and others who are important to the success of your business. Remember to keep these relationships current and your business top of their minds.

16. Meet with your banker quarterly and semiannually

Your bankers' job is to know your business, help you with your finances, and keep your mix of business banking products optimized. The more they know you and what your business needs, the better position they will be in—and the better advice they can give you—to help you maximize cash flow. Give your banker as much accurate information as you can by keeping detailed records of your finances. Find more information on the 4 key financial statements that can help you manage cash flow.

17. Control your business expenses

Review your operations frequently to determine if there are expenses that can be eliminated. Some things a company can do to lower expenses are renegotiate leases, using energy efficient lights and fixtures, leveraging early pay discounts with vendors, controlling payroll and having ready access to profit and loss statements and a balance sheet, so you always know where you are with expenses.

More great information for small business owners

Starting up or growing your business—there's always more to discover.

  • TD Business Solutions Credit Card

    Earn up to 2% Cash Back Rewards on everyday business purchases

  • Small Business Checking Accounts

    Checking that meets your needs and your budget with the perks you want

  • Merchant Solutions

    Manage, grow and protect your business with customized payment services featuring Clover®

  • TD Online Accounting

    Send online invoices, accept credit cards, streamline accounting and track everything all in one place

This article is based on information available in May 2021. It is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.

1Next-business-day funding: Fees may apply for optional services. For merchants with a TD Bank settlement account and TD Bank’s standard payment processing setup, funds will be available in the settlement account by 2 PM ET on the next business day. Availability may vary based on merchant-selected payment processing gateway and other chosen services, including but not limited to, the use of non-TD Bank settlement account.

2Loans and lines of credit subject to credit approval. Some credit restrictions may apply. Other terms and conditions may apply.

3See TD Digital Express for Small Business Service Agreement for more details. Additional fees including early termination, monthly and licensing will apply. Please check your TD Digital Express Fee Schedule for details. Waived implementation fee and discounted pricing offer available to TD Business Premier Checking customers only. Funds generally available next business day. Restrictions may apply.