As we kick off 2025, businesses face a dynamic financial environment where effective cash flow management is more critical than ever. For entrepreneurs and business owners, the ability to consistently generate cash isn’t just about growth and innovation—it’s about ensuring the very survival of your company.
Whether your primary goals are to boost profitability, uncover new revenue streams, or reduce expenses, there are practical strategies you can start using right now to enhance your business’s cash flow. Even highly profitable companies can encounter cash flow issues, especially during periods of rapid growth.
In this article, we’ll explore 10 actionable ways to improve your cash flow and position your business for a strong, financially secure year ahead. From quick wins, to long-term adjustments, these strategies are designed to help you set yourself to financially thrive in 2025 and beyond.
Look within your company
While many business owners automatically look to external funding sources, it pays to look closer to home first.
“Most entrepreneurs don’t realize there is often considerable funding to support growth from within their own business,” says Colin Mills, Founder and Chairman of The CFO Centre. “That’s because the collection of customer receivables can often be improved through strong credit control and the level of stock holding reduced through improved systems and processes. In some instances, poor negotiation of supplier payment terms means fewer funds are available within the business to support scaling up.”
So, before you pick up the phone (or click your mouse) to apply for external funding, consider the following methods for freeing up cash within your business:
#1 Streamline cost structure
Look at all your Operating Expenses (“OpEx”) to see if they can be reduced. For example, consider reducing staff numbers, or not replacing employees when one leaves, or moving locations to obtain a more favorable lease. Oftentimes making spending decision trade-offs can be difficult, establishing a monthly expense budget can help frame the decision-making discussion in a way that makes it easier, especially when OpEx growth is compared with various Revenue forecast scenarios. A fractional CFO is very well-positioned to facilitate a detailed budgeting process, which will help establish clarity around cost structure and expense prioritization.
#2 Negotiate better terms with vendors
Ask for more favorable payment terms from your suppliers. This doesn’t necessarily mean asking for reduced prices. It could be as simple as requesting an extra week or two to your payment window.
If your suppliers refuse your request, look for other suppliers who can offer lower prices or better payment terms for the same quality of the product.
#3 Resolve late payment issues
Set clear payment terms to reduce the risk of late payments. Aim to standardize terms across all customers, such as a 30-day payment window, and secure agreement to these terms upfront. Perform credit checks on new customers or clients to assess their reliability. Issue invoices promptly—ideally on the same day the job or project is completed—and send them via email for faster delivery. Lastly, actively follow up on overdue payments to maintain healthy cash flow.
Get deposits for large projects or orders. Build a deposit (of anywhere up to 50 percent of the total cost) into your contract for large projects or orders. This is especially important if the projects or orders are likely to involve a lot of resources and time.
That way if the customer decides to cancel the project or fails to pay the balance on the project or order, you have at least recovered some of the cost of the resources and time you’ve already invested in it.
#4 Divest/monetize unused assets
If the business has machinery, equipment or large amounts of assets that are idle, consider selling those or renting to other businesses. While the idea of reducing assets in a business can be initially off-putting to a growth-minded Founder/CEO, in some instances this alternative can help drive focus on the core elements of a business, thereby helping to improve performance in the most critical pieces.
Look for External Funding
You should also consider external funding sources to help ease your cash flow challenges. There are a dizzying number of sources to consider, both traditional and alternative, which is why we recommend using the services of a fractional CFO to identify the best method for your company and help you navigate your way through any such process:
#5 Apply for a bank overdraft
A bank overdraft has been the traditional form of funding for many businesses. However, these days banks are more likely to try to steer their clients to other forms of debt that provide the banks with more security.
While overdrafts are usually quick to set up, they have a major drawback. And banks can call them in on-demand.
#6 Request a bank loan
The advantages of bank loans are that they are for a set term with regular repayments, and the banks can’t call the money back on demand. The downside is that banks will demand strong security for the loan, such as a personal guarantee secured on the assets of the business, or even the owner’s personal assets. A fractional CFO – many of which have decades of experience in working with banks to finance companies – can help navigate this process to help obtain reasonable terms from banks, and establish a cadence for how best to work with banks throughout the life of a banking relationship.
#7 Use asset financing
Using your assets as collateral for the loan is one of the easiest ways your growing business can gain access to quick cash. However, there is a drawback: not all assets are considered equal. Typically, lenders will only consider assets that they can sell quickly if you default on the loan. Therefore, they usually want high-value assets with a low depreciation rate or high appreciation rate and which are easy to convert into cash.
#8 Get alternative financing
The alternative finance market includes a wide variety of financing models including peer-to-peer lending, crowdfunding, and specialist finance providers offering products such as selective invoice finance and invoice trading platforms.
The benefit is that since they have greater flexibility than traditional funding sources, they can often offer a faster turnaround on the right deals.
#9 Invoice discounting
The advantage of invoice discounting, in which banks and invoice discounting companies lend money secured against your debtors/receivables, is that you can borrow up to 80 percent of the invoice amount within 24 hours. Therefore, you get the cash flow benefit and the rest when the money is collected.
The disadvantage is that it can cost more than overdraft or loan charges, so it may have a bigger impact on your profit margins.
#10 Peer-to-peer (P2P) lending
P2P platforms match lenders directly with borrowers so you can borrow money from individuals. The huge benefit of this is that the rates are favorable and often much better than any other type of lending method. The disadvantage is that you will still have to undergo a credit check and possibly pay an application fee.
Finally – The easy way to raise cash
Of course, you can make the entire process of finding or raising cash a much easier process by engaging a resource who has expertise in this particular area. And, if your current CFO doesn’t possess this expertise, consider the services of a fractional CFO. The CFO Centre and other organizations offer fractional CFOs with big business experience who can use their expertise to help you uncover or obtain the cash you need to help your company achieve rapid yet sustainable growth. They will help remove the fear and confusion from the entire process, all at a fraction of the cost of hiring a full-time CFO or financial advisor.
Fractional CFO’s can provide valuable insights into your company’s finances, helping you eliminate cash flow issues, uncover cost-saving opportunities, and boost profitability. Additionally, they can support your efforts to expand both nationally and internationally, while enhancing your business’s value to attract potential investors or buyers.
Seth Pinegar, Regional Director (West Coast USA), The CFO Centre
Seth Pinegar is a business-focused fractional CFO and advisor with 25+ years of experience driving growth and successful exits for companies. Following a successful investment banking career at JPMorgan and UBS, and CFO roles in technology and services companies, Seth now leads The CFO Centre’s West Coast operations. He leverages his extensive background to provide hands-on financial leadership to businesses, from day-to-day operational support (restructuring, finance team leadership, reporting improvements) to strategic initiatives (new business development, cost reduction, growth planning). His experience leading over $7B in financings and $5B+ in M&A transactions gives him a unique understanding of what it takes to build a financially healthy and investor-ready business. To find out more about us at The CFO Centre take a look at our website here: https://www.cfocentre.com/us/
