Here at IPromise we talk a lot about cash flow. You may have read our previous articles about cash flow challenges facing small businesses or how overdue invoices and late payments impact Aotearoa New Zealand businesses. Many small business owners start their business with a passion or skill they want to share with others and make a living from. Not many businesses kick off their business venture armed with a cash flow forecast and a strong understanding of their cash flow levers. Small business cash flow is often learnt and managed ‘on the job’. This can work perfectly well as you test a business idea, or, when it’s just you managing all the business administration. But, as soon as you start to grow, with multiple projects, customers or staff, your ability to proactively manage your cash flow becomes under pressure. You need to understand your costs, timing of payments, and forecasting cash flow in the future becomes increasingly important.

This article will take a look at the five key ways for Kiwi businesses to improve cash flow in their small business. So, whether you’re a builder, engineer, architect or plumber, we hope you’ll find some handy cash flow tips to implement in your business today.

1. Send invoices when work is completed

You don’t need to wait until the end of the month to invoice your customers. If you complete a project in the first week of the month, you’re entitled to invoice them immediately, rather than wait another three weeks until the end of the month invoice cycle, and another three or four weeks after that for the invoice due date. You can also elect to invoice for key milestones of a project, so that you can ensure you have cash on hand to purchase supplies for the next phase of the project.

Although the idea of invoicing more regularly throughout the month can feel onerous and time consuming, if you’re using digital invoice software, this process should be straightforward. Any additional administration time you incur should be offset by your customers paying more regularly and more promptly.

When you’re invoicing, another consideration is the payment terms. Are you giving your customers one week or six weeks to pay you? Xero reports that almost 75% of Xero invoices ask for payment within two weeks. Traditional 30 day payment terms were needed in the days that invoices were posted to customers and relied on cheque payments. These days, when invoices are electronically sent and processed, shorter payment periods are becoming the norm.

2. Consider leasing expensive equipment

It may be cheaper over the long term to purchase plant or equipment, but expensive equipment purchases can impact your cash flow. Regular, smaller monthly payments for plant and equipment can help maintain cash flow and secure a cash reserve for unexpected expenditure.

What’s more, leasing equipment will save you from having to regularly incur the additional costs of upgrades and maintenance. Depending on the type of equipment, some assets can date quite quickly so it can be smarter to lease the most current or up to date options rather than purchasing them or buying second hand options.

3. Review your business operations

Are you working smarter? Is your team in a cycle of continuous improvement? Whether it’s your household budget or your business budget, you can always find areas to trim costs, or identify costs you are incurring for a product or service you are not using or not using enough.

Do you really know where you’re spending your money? Breaking down your key expense items even further will allow you to see if you’re paying for subscriptions for digital tools you don’t use, or if there might be a cheaper way of resourcing for particular roles in your business. Some things to consider include:


  • Using freelancers, contractors or specialist third parties to deliver specific aspects of your day to day operations can produce significant time and cost savings.
  • Permanent staff members can be expensive during low volume work periods and recessions.
  • Review your business insurance to make sure that everything in your policy schedule is relevant and needed.


As it becomes more common to work flexibly and remotely, your office premises could be a luxury you could trim to increase your cash flow. As petrol becomes more expensive, consider transitioning work vehicles to hybrid or electric models. If you have fewer people in the office each week, do you need to maintain your regular coffee, fruit and snack orders? There are many ways you can trim costs, and they can add up over a month.

4. Review your payment and collections processes

When was the last time you reviewed your supplier relationships, and fixed payment dates?

Some simple steps can support healthier small business cash flow, including:


  • Timing payments for after your customers have paid you – change your credit card payment dates and payroll dates until after you’ve been paid and guarantee you’ll have money in your account.
  • Review your annual and monthly payments – can you spread your payments to even out your cash flow, or stagger your significant annual payment amounts so they don’t all hit in the same month?
  • Is it cheaper to pay annually? If not, consider switching to monthly to spread those payments out.
  • Are the rates you’re paying competitive? Do your research every 6 to 12 months and understand what competitors are offering.
  • If you are struggling to pay a particular supplier, communicate with them promptly. They may have some flexibility on repayments and would prefer to keep you as a customer.


When it comes to debt recovery, being prompt, consistent and following through on your process are all important steps to ensuring your late invoices are paid.

5. Embrace technology

Apps and online tools to improve your business processes and increase your team’s efficiencies should be embraced. They’re likely to save you time and money, and allow you to be competitive and even be a leader in your industry.

When it comes to the finance function of your business, ensuring you’re using invoice software and smart payment technology like the IPromise app can ensure you get paid promptly once you complete the work required. Invoice software also has inbuilt cash flow management reporting and cash flow forecasting so you can see ahead of time when you can expect to see lower cash flow or a potential cash flow crunch.

Cash flow management remains a key tool for successful, profitable businesses. Without it, you run the risk of being caught out by suddenly needing to replace an expensive tool, weather, a pandemic or paying extra for contractors when a key person leaves your business.

When cash flow exceeds your expectations, use it to generate more income through short term investments, pay down business debt or invest in equipment or other resources that will allow your business to diversify or add an in demand product or service.

If you’re sick of small business cash flow headaches, the IPromise app and its 100% secured customer payments, before the job begins, is a game changer. The reassurance that you’ll be paid immediately after the agreed job is completed can enable you to get on with doing the parts of the business you really enjoy. And who doesn’t want less admin?

IPromise conveniently integrates with Xero accounts, automatically copying IPromise approved quotes/invoices into Xero to reduce your payment administration time by up to 80%.

Whether you work in Professional Services, Construction, Consulting, Manufacturing, or any other service-based industry, IPromise will add payment security, improve cash flow, reduce administration time and enable open, easy communication for your projects.