4-min read Jan 16, 2023

Understanding Cash Flow – How to Keep More Cash in the Bank to Pay Bills on Time

Understanding Cash Flow – How to Keep More Cash in the Bank to Pay Bills on Time

Managing cash flow is one of the hardest parts of any business. While most people want to divide up any profit and pay it out as soon as possible, it’s also important to keep some cash in the bank to pay down debts as soon as they are due to avoid fines and fees. In this article, we aim to answer cash flow management questions that business owners often ask.

What can I can do to ensure I have cash in the bank to pay my bills when they are due?

Managing cash flow is complex, but with a few maneuvers you can figure out how to keep cash in the bank so you can pay your bills on time and keep your company running. Here are three things you can start doing right now:

1. Build A Cash Reserve

Build A Cash Reserve

If you’re tempted to spend your company money as fast as you make it, try opening a completely separate account. Set aside some money into this account any time you can, so that you can build up some spare cash for when your company needs it. This money should be set aside for emergency use only, so that it’s there when you need it. If you have a cash shortfall, you can “loan” yourself money from this account until you’re liquid enough to pay it back.

2. Get A Credit Line

A short-term credit line can help you to quickly get cash in order to pay for expenses such as payroll. Make sure you can find a low-interest and short-term loan so that you’re not putting your company into debt that will eat away at your profits indefinitely. Repay your bank loans for small businesses as quickly as possible to avoid any extra expenses. The best time to establish a credit line is before you need it, so that you’re prepared for anything.

Before your company gets into debt, it’s essential to formulate a plan to get out of debt. Even if it’s an extended period of holding debt, there must be a clear plan with steps you will be taking to pay it down.

Companies that don’t have a plan to get out of debt generally find themselves getting deeper and deeper into debt because they’re constantly paying interest, generating less revenue, and destroying their profit. It starts a downward spiral of cash shortfalls and making poor decisions, because it’s too easy to make poor borrowing decisions if it seems like there will always be a safety net with an extended credit line.

Get A Credit Line

3. Automated Cash Management Tools

There are a number of inexpensive and intuitive cash management tools at your disposal. From basic accounting software, or spreadsheets, to sophisticated software packages, you can find tools that you’re able to implement to help you keep track of cash flowing into or out of your business. Once you set up a system in place, automate the system to make your life easier and more effective.

Some useful possibilities:

  • Create and save accounting report templates that can be used in a dashboard or to monitor specific parts of your business.
  • For Accounts Receivable financing, automate invoices and track when payments are made. Use invoice and tracking software that directly interfaces with accounting software.
  • Use banking tools that automate your recurring payments, which can help you to never miss early-payments discounts.
  • Set up checklists and schedules to ensure that everything is done, every time.

Automated Cash Management Tools

When you inform yourself better on cash flow management processes, it will be easier for you to ensure you have cash on hand in your bank account for when you need it.

Use all three strategies simultaneously for the most comprehensive plan to keep cash in the bank and always get your bills paid on time.

This information was provided by David Safeer. David is a globally recognized expert in cash flow optimization and the founder of David Safeer International, which educates and advises accountants and CFOs on cash flow and profit maximization strategies for their clients. His work has impacted hundreds of businesses with revenues from $1 million – $20 million in 40 countries. David teaches accountants how to grow their revenue with cash flow advisory services through his cash flow advisory certification program and mastermind groups. Schedule a meeting with David to discuss cash flow management here.

Payro Finance is a short-term, low-cost funding solution specifically designed for covering payroll. Once approved, Payro provides same-day funding for payroll. To learn more about payroll funding, schedule a meeting here with Payro’s founder & CEO, Morris Reichman.

Morris Reichman


Morris Reichman is the founder and CEO of Payro Finance. Former Vice President at Infinity Capital Funding an alternative finance company, Morris possesses a versatile background in the finance industry. Having spent 7+ years working across global macro operations and start up corporate finance Morris's expertise is in business accounting, risk management and investment analysis. Morris founded Payro Finance to support business owners and ensure their business continuity.

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