Manage cash rather than bank balance
A positive bank balance can include VAT, payroll or supplier money already committed. Maintain a rolling forecast showing expected receipts, payment dates, tax, debt and minimum cash.
Review overdue debt, stock and work in progress. Profit and cash differ because sales can be unpaid, assets are bought before they are expensed and liabilities fall due at different times.
Close the numbers regularly
Reconcile bank, card, EPOS and payment accounts, post bills and review aged debt and stock. Produce a profit and loss, balance sheet and cash-flow view at a cadence suited to the business.
Compare actual results with budget and prior periods. Investigate meaningful differences in volume, price, mix, margin and overhead rather than explaining every line as 'timing'.
Design repeatable processes
Document critical workflows such as quotation, order acceptance, delivery, invoicing, payment approval, payroll and customer complaints. State the owner, evidence and exception route.
A useful process is short enough to follow and specific enough to test. Review it after incidents and when systems or responsibilities change.
Choose and control business systems
Map requirements before buying accounting, EPOS, CRM or operational software. Prefer dependable integrations and exports over a long feature list.
Give each person an individual account, use multi-factor authentication, remove access promptly and separate preparation from approval for sensitive actions. Test backups and recovery.
Manage people and capacity
Forecast workload and skills, not just headcount. Recruitment, training, supervision, holiday and absence all affect effective capacity.
Set clear objectives and feedback. Follow employment, payroll, pension, health and safety and equality duties, using official guidance and qualified support where needed.
Review suppliers and contracts
Maintain a contract register with owner, cost, end date, notice period, renewal method and data or operational dependency. Start reviews before the cancellation window.
Compare total switching cost and resilience, not just the new rate. Energy, software, card processing, telecoms and insurance can create long commitments or painful migrations.
Prepare for disruption
Identify the people, premises, systems, suppliers and utilities whose loss would stop trading. Write practical alternatives for payment, communication, data access and customer service.
Test the plan. A brief exercise often reveals missing contacts, inaccessible backups or authority concentrated with one person.
Frequently asked questions
How often should a small business review cash flow?
Review it at least often enough to act before a shortfall. Weekly can be appropriate for a tight or fast-moving business; stable firms may use a monthly formal review with more frequent bank monitoring.
Which business processes should be documented first?
Start with processes that move money, create customer obligations, handle sensitive data or depend on one person: sales, delivery, invoicing, payments, payroll and recovery.