When It Comes to the Financial Health of Your Business, How Healthy Is Your Cash Flow?

Cash Flow Specialist (Working w/ £100k-£100M Companies)
Accountant vs Cash Flow Specialist: What’s The Difference

Table of Contents

To survive in the current economy as a business owner, you must understand how to manage your money like a cash flow specialist. And that is why this article aims to educate on how to manage cash flow like a professional. A large number of business owners have no idea how the cash flows in and out of their businesses. To them, it’s a mystery, and they depend on sheer luck for their success. Even with good sales, these businesses can suddenly one day find to their dismay, they are out of cash. And that is why understanding cash flow and properly managing it is so important. As a cash flow specialist with 17 years in the industry, I’ve worked with million-dollar companies in various industries. So, I have some tips to share that will help you think like a proper cash flow specialist.
Cash Flow banner and icons


Walkthrough Of What’s Covered In This Article


What Does A Cash Flow Specialist Do?

cash flow specialist oversees the cash flow management of a business. They prepare statements on the inflow and outflow of cash in the company within a specific time period. They also analyze the cash flow and predict the future cash needs of the company. Overall, their analysis helps the company make the most of its cash.

Preparing Cash Flow Statement

One of the primary tasks of a cash flow specialist is to prepare the cash flow statement. This is essentially a financial report that provides a detailed account of the cash entering and leaving the business during a pre-defined period (year, month, or quarter).

Preparing Cash Flow Statement

When preparing a cash flow statement, the specialist will usually focus on three sectors. Firstly, there are operating activities. This includes the cash flows from core business activities. For instance, the cash your business receives from customers. Or, what you paid the suppliers. The other sectors include investing and financing activities.

A cash flow helps the company and potential investors to understand how the business operates and uses its cash. It provides valuable insight into the company’s financial health and liquidity.

Future Cash Predictions

An important role of the cash flow specialist is to make predictions for the company’s future cash needs. This is called cash flow forecast. It gives the company an idea about what areas of their business would require cash flow in the future. As a result, they can effectively plan the allocation of their company resources.

Future Cash Predictions

The specialist will review the company’s past financial cash flow data to prepare the cash flow forecast. They will also take into account the current market trends and industry benchmarks. A cash flow specialist also collaborates with various departments of the company to gain relevant information and make the forecast as accurate as possible.

Working With Banks

A cash flow specialist can effectively work as a liaison between the company and the bank. Their responsibilities include setting up credit lines, managing loans, and such.

Since the cash flow specialist has the best knowledge about the state of the company’s financial situation, they can negotiate the most beneficial terms during the business’ dealing with the bank.

The cash flow specialist can also work with the bank to set up necessary cash management services. Such as online banking and electronic invoicing. They might also set up sweep accounts with the bank. So that the company’s excess cash is transferred to interest-yielding accounts.

The cash specialist might also conduct audits of bank accounts. By this, they verify the legitimacy of the company’s bank transactions and ensure their proper recording in the books.

Develop Optimization Strategies

Once the specialist gets an overall idea of the company’s cash flow, they can develop strategies to optimize it. For instance, they might suggest plans to time the inflow and outflow of cash to ensure the company has cash on its hands when needed.

The specialist can also identify areas of cost reduction. In this case, they might renegotiate supplier contracts. They might also suggest freeing up cash from less beneficial projects and directing it toward the core activities.

A specialist can use their knowledge and expertise to accelerate the company’s cash flow. They can implement strategies like offering customer discounts for early payment to achieve this. They can also streamline the various work process of the departments to reduce costs and increase cash flow.

Keeping Updated About Cash Flow Policies

The cash flow policies are regularly updated to maintain pace with the changing business world. Cash flow specialists can keep themselves updated about this authoritative guidance on behalf of the company and implement the best practices.

FASB is an organization that issues such updates. Other sources for cash flow specialists to learn the latest policies are industry publications, conferences, etc.

This role of the cash flow specialist saves the company executives from the hassle of reading and understanding the policies. Plus, implementation of the recommended practices saves them from legal trouble with the financial authorities.



Importance Of Cash Flow Management For Small Businesses

Over 80% of small businesses shut down due to cash flow problems. That’s because most entrepreneurs are too busy optimizing their products or service. They neglect cash flow management. When they become aware of the damage that has been done, it’s often too late.

So, if you want your business to be successful, acknowledge the importance of cash flow management from the beginning. Here are some of the reasons why-

Avoid Missed Payments And Debt

Missing payments gets your business a bad rep. Suppliers will be less inclined to work with you. And it would be harder for you to get business loans.

Small businesses often suffer from this due to poor cash flow management. And once debts pile up, it starts eating away the profit you make. Sometimes there might be months you can’t pay your employees. Or, be forced to fire some of them.

Cash flow management improves the visibility of a business’s cash situation. The cash flow specialist can alert you that you have upcoming bills. And in light of your financial situation, you might want to hold off on that extension you were planning.

The expert predictions of the specialist make you aware of potential shortfalls ahead of time. As a result, you can adequately prepare yourself and survive it.

Achieve Positive Cash Flow

To attain financial stability, your business must achieve positive cash flow. It’s a situation where more money is coming into your business than going out. This means you have cash left in your hands after paying suppliers, covering manufacture and promotion, and clearing salaries.

Positive cash flow helps your business create the cash reserves it needs to take on new challenges. It gives you the affordability you need to experiment with a new product.

Small businesses can achieve this positive status if they are consistent with their cash flow management. They will quickly identify areas of the business that keeps bringing in money and focus more on them. At the same time, you will recognize the losing sectors and take appropriate action.

Get More Customers

A well-managed cash flow helps you get more customers. For instance, you can find the cash you need to re-invest in your product and service. You can also make investments in marketing efforts so that more people can know about your business.

A major reason businesses lose customers is that they cannot fulfil orders on time. This happens because they sometimes run out of cash to stock their inventory. Proper cash flow management can significantly lower the chances of something like this happening. As a result, you have more satisfied customers.


4 Strategies Used By Cash Flow Strategists Working With Million-Pound Businesses

A cash flow strategist uses several strategies to help a business reach financial stability. For instance, they ensure timely payments from the customer. Thus, reducing the incidence of missed payments. They can also identify and eliminate products that are not performing well and make the business lose money. Let’s review six common cash flow management strategies.

Prompt Invoicing

A cash flow specialist establishes a culture in the workplace that favours positive cash flow. This includes the practice of invoicing customers immediately after the completion of a sale or service. As a result, your company receives timely payments from your customers and improves the cash flow.

Prompt Invoicing

In contrast, late invoicing increases the risk of missed payments. And when you are running a big operation it’s difficult to keep track of all the payments you didn’t receive. Eventually, these can create unexplained gaps in your company’s cash flow and make it unstable.

Mobilize Slow-Moving Inventory

Since the cash flow specialist analyzes, tracks, and maps all the cash entering and leaving the business, they are quick to identify the inventory items that don’t sell well. These items have cash tied up to them. Plus, they cost your business in terms of storage space.

After identifying the items, the business can utilize several methods to mobilize them. For instance, you can sell them at huge discounts. This will free up the tied cash and improve the overall flow. You might also bundle them with fast-moving products and increase your existing sales.

Secure Financing

As mentioned earlier, a cash flow specialist can predict when your company will be short on cash in the future. Based on this forecast, they can start arranging for loans beforehand. So that, when that period of cash shortage finally arrives, you can don’t have to shut down operations and save your business.

Secure Financing

To secure the financing of your business, the cash flow specialist can reach out to banks and potential lenders. Since they are well aware of your business’s current and future cash situation, they can negotiate the most favourable terms for the loan.

The cash flow specialist is your best man to secure financing for various other reasons too. For instance, your potential lender might want to review your recent cash flow statement and forecasts when confirming a loan. And the cash flow specialist can readily help with that.

Restructuring Payments

Cash flow strategists can restructure payments in your business to improve the cash situation. For instance, they can renegotiate the contract terms with your suppliers. They might ask for lower interest rates and longer payment terms. Such restructuring can put more cash on your hands, which you can use to optimize your operations.

Whether or not your suppliers agree to new terms depends much on how well you can convince them. A cash flow strategist can take care of this by presenting facts and figures about the future potential of your company. They can also make the suppliers understand how this restructuring will help both parties in the long term.


How Do Cash Flow Specialists Help To Manage Negative Cash Flow?

You can manage negative cash flow by implementing proper cash flow management strategies. Cash flow statements, forecasts, and intensive monitoring of your income and spending can help you manage negative cash flow.

How do Cash Flow Specialists Help To Manage Negative Cash Flow

Negative cash flow is the opposite of positive cash flow. It essentially means more money is going out of your business than coming in. A negative cash flow doesn’t exclusively mean your company is facing losses or failing. You might be selling more products than ever and still experience negative cash flow.


However, negative cash flow always indicates that your company is not maintaining a balance between expenditure and income. So, reviewing your recent cash flow statements and financial history is essential before you make a significant purchase or open new positions.


To reduce negative cash flow, you need to review the areas where your company spends money regularly. You have to investigate whether this spending translates into more business for the company. Here you will require the detailed overview only a cash flow specialist can provide.

For instance, you might have invested in a marketing campaign for some time. You need to review whether this campaign is effectively bringing in more customers than before. In other words, you are getting your money’s worth out of this operation. If not, then it’s the reason for your negative cash flow, and needs to be shut down.


Which Businesses Should Start Working With Cash Flow Specialists?

All businesses should start working with a cash flow specialist. You might be able to keep track of the incoming and outgoing cash for a while when your business is still small.

But once it reaches significant proportions, you must seek the assistance of a cash flow specialist for sustenance and growth. That said, here’s a general idea of the type of businesses than can benefit much from cash flow management.


Many start-ups fail not because of incompetent service but due to poor cash flow management. Entrepreneurs can get lost in the process of improving and promoting their products. Then one day, they discover themselves in a grave financial situation.

Startup business

So, startups should start working with a cash flow specialist from day one. This will help them get the most out of their limited reserves. At the same time, they would be able to avoid financial disasters.

Businesses Experiencing Unexpected Growth

Up till now, you may have managed cash flow by yourself. It was possible because your business was progressing slowly. However, a recent marketing strategy, product improvement, or a new branch might have suddenly started bringing in more customers. In other words, your business is experiencing unexpected growth.

Businesses Experiencing Unexpected Growth

If you want to maintain this new growth and take your company to higher levels you must start working with a cash flow specialist. Otherwise, the sudden inflow and outflow can easily overwhelm your system and hinder your progress.

Seasonal Businesses

Seasonal businesses usually don’t need a cash flow specialist all year round. However, this also puts them at risk of not developing proper cash flow management strategies. As a result, when they encounter a huge rush during the business season, they undergo extreme stress in managing their cash flow.

Seasonal Businesses

Therefore, seasonal businesses (like those dependent on tourism) must start working with a cash flow specialist weeks before the season starts. It’s not mandatory to have an in-house specialist. You can hire cash flow managers who work on an outsourcing basis.


How Does A Cash Flow Specialist Help Business Owners?

A cash flow specialist helps business owners in various ways. A business owner might be an expert on the service they sell. However, managing cash flow requires education and professional training that only a cash flow specialist posses. They can use their qualification to make life better for business owners.

How Does a Cash Flow Specialist Help Business Owners

Firstly, they take off the stress of managing cash flow. Even in moderate-sized businesses, cash flow management is a sector that demands 24/7 attention. If an owner has to occupy himself with cash flow management, they wouldn’t be able to focus on the more important task- i.e. growing their business.

Secondly, a cash flow specialist can identify which departments and employees are underperforming in the company. They can present the necessary facts and proof the owner needs to confront the incompetent staff.

In the same vein, they can identify the employees who are doing better than everyone else. The owner can reward such an employee or the department to encourage them. This way, a cash flow specialist can help improve workplace efficiency.

Lastly, a cash flow specialist can save an owner from unpleasant exchanges with suppliers and their staff. Such, unpleasantness usually occurs when the owner is unable to pay the suppliers on time or clear salaries. But a cash flow specialist prevents such incidences by predicting cash shortfalls ahead of time.


Factors To Consider When Hiring A Cash Flow Strategist

Hopefully, you understand now how important professional cash flow management is for a business. Now you might wonder how you can appoint the right cash flow specialist for your company. Here are some of the factors you should consider-


  • They have prior experience in managing businesses similar to yours.
  • Educational background in financing or accounting.
  • Excellent communication skills to effectively interact with suppliers, lenders, and your staff.
  • General intelligence to find spontaneous solutions to small problems.
  • Skills to work with the latest tools and AI technology.


Accountant Vs Cash Flow Specialist: What’s The Difference?

Accountants and cash flow specialists are professionals who work with financial data but have different areas of expertise and responsibilities.

Accountant vs Cash Flow Specialist: What’s The Difference

Accountants are trained to manage a company’s financial records, including bookkeeping, financial statements, tax preparation, and auditing. They analyze financial data to help businesses make informed decisions about their finances and comply with financial regulations.

On the other hand, cash flow specialists focus specifically on managing a company’s cash flow. They help businesses understand where their cash is coming from, where it’s going, and how to optimize their cash flow to meet financial goals. This can include developing cash flow projections, identifying areas of inefficiency, and implementing strategies to improve cash flow.



What Degrees Should A Cash Flow Specialist Have?

A cash flow specialist should at least have a bachelor’s degree in finance or accounting. It would be even better if you can get someone with a master’s in business administration or finance. Expert cash flow strategists also have credentials like Chartered Public Accountant (CPA) or Chartered Financial analyst (CFA).

How Much Does It Cost To Hire A Cash Flow Specialist?

An average cash flow specialist works for a 40,000 £ yearly salary. However, those with greater educational qualifications might demand more. You might also hire on an outsourcing basis. In that case, you can expect to pay around a 19-20£ hourly rate.

Where Can I Hire Cash Flow Management Services?

Although there are major freelancing platforms’ finance and accounting sections such as Fiverr and Upwork, you can start your search process in Google. You can ask your peers and mastermind groups, as you will be sharing your confidential information, so you want the cash flow specialist to be trustworthy.



If you want to grow your business and reduce the chances of bankruptcy, start working with a cash flow specialist today. And if you are determined to handle your company’s cash flow on your own, let Shishir teach you how you can do it effectively.

In the meantime, if you are concerned about your cash flow health, then you can take this quiz to find out how healthy is your cash flow

And you will get the cash flow report highlighting cash flow mistakes you are probably making and the detailed action plan to implement in your business.

Shishir Khadka, qualified as a chartered certified accountant in 2009. He is the creator of cashflow hub– the world’s most comprehensive cash flow resource online and is one of the UK’s leading cash flow specialist who helps busy business owners and entrepreneurs generate more profit and create consistent positive cash flow without over relying on getting new sales.

He has delivered a masterclass to a global software Zoho’s audience to create consistent cash flow. He has written articles for floatapp– one of the leading cash flow software and has also been featured in the major publications such as Independent. He has been sharing his learning and insights on his youtube channel.

He wrote about his learnings from helping an e-commerce client scaled the business cash flow positive from £500k to £1.6m in four years in “The Three Key Obstacles to Faster Growth: How You Can Overcome Them Using Cloud Accounting.

In his career spanning 18 years as the cash flow specialist, he has helped businesses of all sizes, ranging from £40K to £40M.

John Doe
John Doe
Read More
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
John Doe
John Doe
Read More
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
John Doe
John Doe
Read More
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
More Topics
1 resources