When running a small business, few things are more important or stressful than cash flow. You could have tons of new clients or big projects lined up, but if your cash flow isn’t steady, your business will always feel like it’s in survival mode.
That’s where accounts payable (AP) and accounts receivable (AR) come in. They’re the core of your cash flow: how money comes in and goes out. At Cambry Consulting, I help small business owners manage AP and AR more efficiently so they can stop worrying about finances and get back to doing what they love.
If you’ve ever felt the sting of a late payment or a surprise bill, this guide is for you. Here’s how better AP and AR management can keep your business cash flow positive—and how to get started.
What Is Cash Flow?
Cash flow is the movement of money in and out of your business. It’s not just about profit; it’s about timing. You might be profitable on paper, but if your cash is tied up in unpaid invoices or unexpected expenses, you could still struggle to pay your bills or make payroll.
Cash flow comes down to three things:
- How much money is coming in (Accounts Receivable)
- How much money is going out (Accounts Payable)
- When those transactions happen
Let’s break each one down and explore how to improve it.
1. Get Paid Faster: Fixing Accounts Receivable Issues
If your customers or clients aren’t paying on time, your business suffers—even if your sales are strong. Late payments can quickly create a cash crunch.
Signs You Have AR Problems:
- Frequent late payments from clients
- Unsent or forgotten invoices
- Time wasted tracking down overdue payments
- No consistent system for following up
How to Improve Accounts Receivable:
Invoice Promptly and Accurately
Send invoices immediately after a product or service is delivered. Ensure they include all relevant details: due date, payment options, late fees, and contact info.
Use Invoicing Software or Systems
Whether it’s QuickBooks, Wave, or another platform, automated invoicing helps you stay organized, track payments, and send reminders without lifting a finger.
Offer Easy Payment Options
Make it simple for clients to pay. Credit cards, ACH transfers, and online payment links reduce friction and speed up the process.
Set Clear Terms
Don’t leave payment expectations vague. Use net-15 or net-30 terms and enforce late fees where appropriate.
Follow Up Consistently
Send polite reminders a few days before the due date and again if a payment becomes overdue. Consistency is key to getting paid on time.
2. Control Outflow: Smarter Accounts Payable Practices
Just as it’s essential to get paid on time, it’s also crucial to manage how and when you pay your vendors, contractors, and bills.
Common AP Mistakes:
- Paying bills the moment they arrive (without checking cash flow)
- Forgetting due dates and racking up late fees
- Lack of documentation or approval process
- Missing out on early payment discounts
How to Improve Accounts Payable:
Know What You Owe
Keep a centralized list or dashboard of all upcoming payments, including due dates and amounts. Don’t rely on email chains or memory.
Schedule Payments Strategically
If a bill is due in 30 days, don’t rush to pay it on day one unless there’s a benefit (like an early payment discount). Pay on time—not too early or too late—to maximize your cash position.
Review and Approve Bills
Always check that invoices are accurate and match what was agreed upon. Mistakes happen, and overpayments add up.
Automate Recurring Expenses
Set up automated payments for monthly bills that don’t change (like subscriptions or rent), so you never miss a due date.
Build Relationships with Vendors
Vendors appreciate clear communication. If you’re ever tight on cash, a solid relationship might give you the flexibility you need in a pinch.
3. Find the Balance Between AR and AP
Here’s the tricky part: your outflow (AP) often happens on a fixed schedule, but your inflow (AR) can be unpredictable. The key to staying cash flow positive is bridging that gap.
Tips for Maintaining Balance:
- Use your AP and AR reports to forecast cash flow at least 30–60 days out.
- Avoid making large payments right before major receivables are due.
- Set aside a buffer (cash reserve) to cover any timing gaps.
- Prioritize collecting from slow-paying clients before committing to new expenses.
Bonus Tip: Consider using cash flow projections or dashboards to visualize your upcoming weeks or months. Even a basic spreadsheet can help you anticipate dips and prepare accordingly.
4. Don’t Wait Until There’s a Problem
Cash flow issues rarely happen overnight—they build slowly, with minor issues snowballing into big ones. The sooner you get a system in place, the better.
Signs You Need Help Managing AP/AR:
- You’re constantly worried about paying bills
- Clients are routinely late in paying you
- You don’t know who owes what, or when
- You’ve been surprised by large bills or overdraft fees
If any of that sounds familiar, know you’re not alone. Most small business owners didn’t start their business to manage invoices or track down payments. That’s where a back-office partner like Cambry Consulting can step in and lighten the load.
How Cambry Consulting Can Help
I specialize in helping service-based businesses, solopreneurs, and small teams take control of their finances without getting bogged down in the details. My Accounts Payable & Receivable services are designed to:
- Set up clear, reliable invoicing systems
- Track outstanding bills and payments
- Manage vendor and client relationships
- Ensure payments are made (and received) on time
- Free up your time so you can focus on growth
Everything is integrated with your monthly bookkeeping, so you have a complete picture of your financial health—all in one place.
Final Thoughts: Cash Flow Doesn’t Have to Be a Rollercoaster
When you improve your AP and AR systems, everything gets easier:
- Bills are paid on time
- Clients pay faster
- You have fewer surprises
- You can plan for growth
Your business doesn’t have to live month-to-month. With the proper support, you can stay cash flow positive and make financial decisions with confidence.
Want to Fix Your Cash Flow?
Let’s talk! I offer free consultations to help you assess your AP/AR systems and create a plan that fits your business. Whether you need a minor cleanup or full ongoing support, I’m here to help.