Guide
Cash flow management: the routine, not the theory
Cash flow management is not a spreadsheet, it is a habit. Profitable businesses and well-paid freelancers both run out of money for the same reason: money arrives after it is needed. The routine below is what prevents that.
- Weekly, ten minutes
Enter actuals, roll the window forward, look at the lowest projected point.
- Watch the trough
The lowest projected balance is the only number that predicts trouble.
- Pull the timing levers
Deposits, shorter terms, moved due dates and staged payments all beat borrowing.
- Hold a real buffer
Three to six months of fixed costs turns a crisis into a scheduling problem.
The weekly routine
- Enter every actual inflow and outflow from the past week.
- Update any expected payment whose date has slipped.
- Add newly agreed work and newly received bills.
- Read the lowest projected balance in the next 13 weeks.
- If it is below your buffer floor, act this week — not when it arrives.
Levers, in order of preference
- Ask for a deposit or staged payments on new work.
- Shorten payment terms on new contracts and invoice the day work is delivered.
- Chase overdue invoices on a schedule rather than when it becomes urgent.
- Move flexible outgoings to after your reliable income dates.
- Delay discretionary purchases past the trough.
- Only then consider a credit facility, and only for a timing gap, never a profitability gap.
The three numbers to track
| Metric | What it tells you | Healthy target |
|---|---|---|
| Lowest projected balance (13 weeks) | Whether you clear the next quarter | Above your buffer floor |
| Days of runway | How long you survive at current burn | 90+ days |
| Average days to get paid | Whether your terms are real | Under 30 days |
Frequently asked questions
What is cash flow management?
The ongoing practice of projecting, monitoring and adjusting the timing of money entering and leaving your accounts so you can always meet obligations.
Why do profitable businesses run out of cash?
Because profit is measured over a period while cash moves on specific dates. Late-paying customers and front-loaded costs create gaps a profit figure never shows.
How often should I review cash flow?
Weekly for a rolling 13-week window, with a deeper monthly review of trends and terms.
What is a healthy cash buffer?
Three to six months of fixed costs for most freelancers and small businesses, more if income is seasonal or concentrated in a few clients.
Ten minutes a week beats a crisis
Free forever, no bank linking, recurring items roll forward on their own.