8 Practical Strategies to Improve Profit and Cash Flow

For many years, pensions and trusts have been powerful tools for business owners looking to protect their wealth and pass assets to the next generation efficiently. For business owners who have relied on pensions as a safe way to pass wealth to the next generation, this represents a fundamental shift.

Many businesses struggle with one while managing the other, but long-term success requires both to move in sync. Here’s how to structure your business to maximise profit and cash flow together.

Accelerate receivables

Send invoices immediately after delivering your product or service. Then use cloud-based tools like Xero to send automatic reminders and track overdue payments. Encourage customers to pay faster by offering small discounts (e.g. 2%) for early settlement. This can speed up cash collection without heavily impacting margins.

Reduce Days Inventory Outstanding (DIO). Use data-driven forecasting and demand planning to avoid overstocking. Digital inventory tools can help maintain lean stock levels while meeting customer demand. Liquidate slow-moving stock: Free up cash by clearing out obsolete or excess inventory. Run clearance sales, bundle items, or offer bulk discounts to move stock faster.

Shift supplier terms from net-30 to net-45 or net-60 where possible. Always pay on the due date, unless incentivised to pay earlier. Streamline accounts payable with scheduled electronic payments. Bundling payments can also strengthen supplier relationships and create leverage for better pricing.

Set a target of maintaining a 3–6 month buffer by setting aside cash reserves to weather seasonal fluctuations or unexpected downturns. Think of this as your financial safety net which ensures business continuity in the event of a unexpected squeeze on cash, such as a large customer going bankrupt with a significant amount of money outstanding.

Use rolling cash flow forecasts to track cash weekly or monthly to anticipate shortfalls or surpluses. Rolling forecasts help you make timely, informed decisions and avoid having to be reactive to cash crunches.

Review all outgoing expenses quarterly. Take proactive action to cut unnecessary subscriptions, renegotiate supplier contracts, and reduce energy or occupancy costs where feasible.

Consider recurring revenue models like subscriptions, upsell complementary services, or form partnerships to broaden reach. Expanding into new markets and different revenue streams, such as offering a subscription-based service, can allow you to win business that may be low-hanging fruit in a market you previously hadn’t been playing in.

It’s important to fully understand the differences between a new market and your current market, and the impact this will have on your business. Will you have to price more aggressively, for example, in a new market? You may want to reach out to your accountant for help in mapping out the financial impacts of any market expansion strategy.

Implementing price rises between 3% and 5% can go unnoticed by customers but can significantly improve profit margins. You may specifically want to focus these on areas of your business that are achieving a lower-than-average gross profit %. If you don’t know which areas of your business are under or overachieving on gross profit, you should reach out to your accountant for help to understand this.

Tools like QuickBooks and Xero offer automation for invoicing, reconciliation, and cash tracking which reduces admin and improving accuracy. Use real-time data to forecast more accurately. This supports smarter planning, better investment timing, and improved cost control.

Use invoice financing: Free up working capital by borrowing against outstanding invoices. This can be especially useful when customers pay on long terms, however, it’s always important to be aware of the interest cost associated with some financing methods. Having a pre-approved business line of credit provides peace of mind and cash flexibility during seasonal dips or large outlays.

In conclusion…

With consultations closed and draft legislation published, the direction is clear, and the impact for business owners could be profound. Acting early gives you more options, and it has never been more important to take professional advice about your estate planning. As you navigate these changes, professional advice tailored to your circumstances is essential. The landscape has shifted, but with proper planning, effective strategies can still be implemented. The message is clear: don’t wait until 2027, start planning now.

Next steps

Improving profit and cash flow doesn’t always require drastic change, it’s about making small, consistent improvements across key areas of your operation. From speeding up receivables and tightening inventory to enhancing forecasting and exploring alternative financing, each step contributes to a more profitable business

Need help with cash flow forecasting and management reports? 
Contact us at info@oldfieldadvisory.com or 02476 673160. 
Alternatively try our free tool.

Try our free tool

Please note: This article is for general information purposes only and was correct as at the time of writing (03/09/25) and does not constitute financial advice. Tax rules and legislation are subject to change, and their application depends on your individual circumstances. We recommend seeking advice from a suitably qualified tax adviser, and where relevant, an FCA-authorised financial planner. Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.