Closing the Cash Gap: How to Stay in Control of Your Cash Flow

Cash flow gaps are something we see come up time and time again with business owners across East Anglia.

On paper, the business can look healthy. Sales are coming in, work is steady, and things appear to be moving in the right direction.

But behind the scenes, there’s pressure.

What is a cash flow gap?

A cash flow gap is simply a period where more money is going out of your business than coming in, even when you factor in your cash reserves.

And the challenge is, many businesses don’t realise it’s happening until they feel the impact.

That often shows up as:

• Worrying about covering wages

• Delaying payments

• Or feeling busy, but still short on cash

Why this happens (more often than you’d think)

We recently worked with a business owner here in Bury St Edmunds who was doing well in terms of sales and demand.

But every month, the same concern came up:

“Are we going to cover salaries?”

When we looked at the numbers, the issue wasn’t revenue.

It was timing.

They were offering 30-day payment terms, which meant cash was coming in too slowly to match what was going out.

A simple shift that made a big difference:

We reduced payment terms from 30 days to 14 days. This didn’t happen overnight. It involved conversations with existing customers and setting expectations with new ones.

But once it was in place, the pressure eased almost immediately.

It also required a shift in mindset. Just because something is considered “standard practice” doesn’t mean it’s right for your business.

Closing the gap: where to start

If you want to take control of your cash flow, the first step is understanding where the gaps are coming from.

That means looking at:

• When money comes in

• When money goes out

• Where delays are happening

Once you can see it clearly, you can start to take action.

Practical ways to close cash flow gaps

Here are some simple, effective ways to improve your cash flow:

• Ask for partial or full payment upfront
• Invoice immediately on completion
• Move invoicing to weekly instead of monthly
• Send regular reminders at set intervals (e.g. 14, 30, 45 days)
• Negotiate longer payment terms with suppliers

These aren’t groundbreaking ideas, but they’re often overlooked during the day-to-day running of a business.

Managing accounts receivable

For most businesses, unpaid invoices are one of the biggest causes of cash flow pressure.

It’s not just about whether you’ll get paid.

It’s about when.

A few simple measures can give you better visibility:

• Average collection time – how long it takes to get paid

• Receivables vs sales ratio – how much of your revenue is tied up in credit

• Ageing reports – which customers are consistently late

This helps you spot patterns and take action early.

Managing accounts payable

It’s just as important to understand your outgoing payments.

An accounts payable schedule gives you visibility on:

• what’s due

• when it’s due

• how much cash is required to cover it

This allows you to plan ahead and avoid unnecessary pressure.

Final thoughts

Cash flow is one of the most important parts of any business.

In many cases, it’s the difference between growth and stress.

When you understand your cash flow and take control of it, everything else becomes easier. You can plan ahead, make better decisions, and focus on growing the business.

Ready to take control of your cash flow?

If you’d like support reviewing your cash flow and identifying opportunities for your business, the best place to start is a conversation.

👉 Book a call and start the conversation.