Improve visibility and predictive modelling
Many business owners are still managing cash flow by simply checking their bank balance or looking at historical cash positions. This offers a snapshot of available cash rather than providing the forward-looking insights needed to anticipate shortfalls, plan for growth, or respond to market volatility. Businesses relying on outdated spreadsheets or after-the-fact reporting are vulnerable. “Most businesses can tell you their current cash position, but few can confidently tell you what it will be in 30 days. Those that can answer this question gain a real advantage,” said Matthew Sturges, Cloud Accounting Service Leader at BDO Canada.
There’s a need to shift from tracking historical cash position to forecasting future cash flow. Predictive modelling enables you to see what’s ahead, not just what’s already happened. This approach is more nuanced and complex, requiring businesses to integrate predictive modelling tools into their accounting infrastructure and schedule regular reviews of cash flow projections, updating them as new information becomes available.
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Strategic spend management in response to uncertainty
When facing recessionary periods or economic uncertainty—such as tariffs that disrupt supply chains and drive-up costs—managing your spend is critical. Low inflation means both consumers and businesses have a low tolerance for price increases. Whether operating in B2B or B2C markets, the expectation is tighter management over operating expenses and discretionary spending.
Careful spend management helps businesses maintain margins and weather uncertainty, positioning them for growth when conditions improve.
Optimize working capital: payables and receivables
Optimizing working capital is another key strategy for maintaining a healthy cash flow. Businesses should aim to accelerate receivables by collecting payments from customers as quickly as possible, while also extending payables to suppliers. Review all current payment terms with suppliers—including late payment fees and discounts for early payment—to mitigate additional costs.
It’s important to balance the benefits of delayed payments with the need to maintain trust and reliability with your suppliers.
On the receivables side, streamline your invoicing process and follow up promptly on outstanding accounts. Offer incentives for early payment and use technology to automate reminders and track collections.
By managing both sides of the equation, businesses can retain cash, reduce risk, and gain greater flexibility.
Manage borrowing and financing
Most companies rely on some form of financing to start or operate their business, but not all debt is created equal. When interest rates are high, borrowing costs can strain your cash flow. Regularly reassess your financing arrangements, prioritize paying down high-interest debt where possible, and explore options for refinancing or consolidating loans to reduce costs. Understanding the structure and cost of your debt empowers you to make smarter financial decisions and strengthen your financial position.
Leverage technology and improve data governance
Technology can make a huge difference in your ability to manage cash flow. Cloud-based accounting platforms offer real-time visibility into your finances, automate routine tasks, deliver consistent reporting, and enable benchmarking against others in your industry.
But here’s the catch: garbage in, garbage out. The technology is only as good as the data you put in. If you’re not entering accurate financial data, including supplier terms and due dates, you’re not going to get the insights you need for reliable forecasting and informed decision-making.
Cash flow is unique to each business, so combining cutting-edge accounting technology with hands-on advisory support is where the real value comes in. An experienced advisor can help you dig into the numbers, interpret what’s happening, and provide tailored recommendations. It’s this combination that sets businesses on the path to effective cash flow management.
How cloud accounting technology supports succession and long-term value
Many owners are running their business on gut instinct or intuition because they know their business so well. But when it’s time to hand things over, whether that’s to the next generation or a new owner, that knowledge doesn’t transfer.
As Jim Krahn shared, “Mom and dad might know the business inside and out. They know every corner of the shop floor, how much inventory they have, and how much it costs. But when the kids do the same, they’re starting from scratch, they haven’t lived it.”
That’s why it’s so important to get critical information into reliable systems, trusted tools, and documented processes. Advisors can play a key role in guiding this transition. The more you invest in this process the smoother your succession will be, and the greater value your business will have when it’s time to sell. Accounting technology supports day-to-day operations, but it also safeguards your legacy and maximizes long-term value.
Improve your cash flow with BDO
Managing cash flow means making decisions based on good information—not just gut instinct. At BDO, we help businesses go beyond the basics of forecasting by exploring “what ifs” and scenario planning. Whether you’re considering pessimistic, expected, or optimistic outcomes, sensitivity analysis lets you see the real impact of price changes and cost pressures, so you know exactly what your business needs to thrive.
With cloud accounting technology, you gain real-time visibility into your finances and the ability to automate routine tasks, benchmark performance, and model different scenarios. Pairing these tools with hands-on advisory support allows you to turn data into actionable insights.
Ready to make smarter decisions?
Learn how cloud accounting technology and our experienced advisors can help your business thrive.