Manage Cash Flow Better with Smart Accounts Payable Tactics
- Irvine Bookkeeping
- Apr 7
- 5 min read
For real, cash flow can feel like a roller ride, right? You may have a lot of money one day and not enough the next. Sometimes money doesn't go where you need it to. I know how stressful that can be. With some smart accounts payable moves, you can get a handle on your cash flow. Not just fancy accounting words, these are real steps you can take to keep your business's finances stable and your stress level low.
This piece is full of useful information, real-life examples, and quick answers to your most pressing questions about how to use accounts payable to manage cash flow. Join us and turn that small amount of money into a steady flow
What’s the Deal with Cash Flow and Accounts Payable?
Here's a breakdown of the plan before we get into the techniques. Cash flow is the amount of money getting into and going out of your business. It includes things like sales and bills. Bills to be paid? That's the pile of bills you need to pay vendors, suppliers, or people you got things from on credit. This is like the "IOUs" of your business.
They're linked because when and how you pay your bills can either make or break your cash flow. Should you pay too soon, you may not have enough money to meet other obligations. Paying late can cost you money or make sellers angry. Managing your accounts payable in a smart way keeps you in cash and on good terms with your providers. Prepared to make it work? Allow us to leave.
5 Smart Accounts Payable Tactics to Boost Cash Flow
These strategies are your toolkit for better cash flow management. They’re simple, effective, and tailored for business owners like us who wear a million hats.
1. Negotiate Longer Payment Terms
Most vendors start with terms like “Net 30” (pay in 30 days). Why not ask for Net 45 or Net 60? Longer terms mean your cash stays put longer, giving you flexibility.
Example: A $3,000 invoice due in 30 days vs. 60 days? That’s an extra month to use that cash for inventory or marketing.
Tip: Prove you’re reliable first—pay on time for a few months, then pop the question.
2. Grab Early Payment Discounts
If you pay within 10 days, some sellers will give you a discount of 2%, which they call "2/10 Net 30." This could save you a lot of money if your cash flow is good.
Question: “Does this really help?” Yep! On a $2,000 invoice, that’s $40 back in your pocket.
Tip: Only jump on it if you’ve got the cash to spare—don’t stretch yourself thin.
3. Schedule Payments Like a Pro
Plan ahead instead of just paying bills as they come in. Balance your spending with your income, and if you can, put off bills that aren't necessary.
Example: If rent’s due but a big client pays next week, hold off on smaller invoices until the cash lands.
Tip: Use a calendar or app to track due dates and prioritize.
4. Automate with Accounting Software
Keeping track of invoices by hand is a pain. Wave and QuickBooks can track, remind, and pay your bills.
Tip: Set up alerts for due dates so nothing slips through the cracks.
5. Forecast Your Cash Flow
Spend 30 to 90 days thinking about the future. You can pay your vendors on time if you know what's coming in and going out.
Example: A $5,000 bill looms, but you’ve got $7,000 due from a client soon—delay payment if you can.
Tip: Use a simple spreadsheet: list income, expenses, and dates weekly.
Common Cash Flow Blunders and How to Dodge Them
Some mistakes are normal, and everyone makes them. Here are some things to watch out for when it comes to accounts payable:
Paying too much too soon: Paying all of your bills right away can leave you short on cash. Adjust the payments to fix it.
Not Meeting Due Dates: Late fees and tense relationships with vendors hurt cash flow. Use automated or set alerts.
There Is No Plan: When you pay without a plan, chaos happens. Plan your money flow to stay in charge.
Advice You Can Use: Every week, check your bills to be paid. It's kind of like a quick check on the money side of your business.
Where Bookkeeping Fits In
There it is: good accounting is what keeps your cash flow going. Not just writing down numbers, but also getting a sense of the bigger picture. Keeping track of all the information about accounts payable is important. This includes billing amounts, due dates, and the status of payments. This is also related to accounting because it helps you keep your books clean and your finances in good shape.
A Real-World Win: Cash Flow Turned Around
Meet Jake, who runs a small landscaping company. His cash flow was a mess—paying bills randomly, missing discounts, and stressing over payroll. He tried these tactics:
Stretched payment terms to Net 45 with his equipment supplier.
Used accounting software to automate invoice tracking.
Forecasted cash flow to align payments with client invoices.
In six months, Jake built a $4,000 cash reserve and stopped sweating the small stuff. Smart accounts payable moves changed the game.
Bookkeeping Tips to Master Cash Flow
Let’s get practical. Here are some bookkeeping tips to make accounts payable your cash flow secret weapon:
Batch Process Payments: Pay your bills once or twice a month with batch processing. This will help you budget your money and save you time.
Build a Buffer: Try to save enough cash to cover your costs for one month. The right time will help you get there.
Talk to Vendors: Not having enough cash on hand? Ask about payment plans; most will work with you if you ask right away.
Track Key Numbers: Monitor your Average Payment Period—how long you take to pay. Longer (within terms) = better cash flow.
Tip: Start with one change—like scheduling payments—and watch the difference.
DIY Cash Flow Control vs. Calling in the Pros
You can definitely handle this on your own. Using a worksheet, make a list of all the people you owe money to and set reminders for when they are due. You can see your cash flow on a dashboard if you add financial software. It feels good when the money for your business starts to come in after all your hard work.
Though, let's be honest: managing a company is a full-time job. If paying bills feels like a job that keeps you from focusing on other things, you might want to outsource. Which is why Irvine Bookkeeping is needed. With smart accounts payable strategies, we know how to help small and medium-sized businesses like yours keep their cash flow in check. Our method, which is based on software, guarantees accuracy, saves you time, and keeps your finances in great shape, so you can focus on growth instead of doing math.
Managing your accounts payable effectively can lead to improved cash flow. These tactics, which range from negotiating terms to automating payments, empower you to take control of your business finances. Whether you choose to manage your finances independently or seek assistance from professionals such as Irvine Bookkeeping, the outcome remains consistent: increased revenue and reduced stress.
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