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Lucy Liu is the Co-founder and President at Airwallex. She discusses small business cashflow.

Lucy Liu, Co-founder and President at Airwallex.

Three simple steps to improve your small business cashflow

Ask any small business owner what keeps them up at night and they will say cashflow is their top concern. Understandably so, as it plays a pivotal role in a business’ survival.

This year has started out rough for all of us. In Australia, we first had to fight through the bushfire crisis, and now we are confronting the COVID-19 pandemic. Small businesses in particular have been badly impacted, and are inevitably looking at cost-cutting measures to keep afloat during these uncertain times.

It is important – more now than ever – for small businesses to improve their cashflow. The good news is there are a few simple ways to do that without resorting to stock-cutting or downsizing.

What is cashflow?

Cashflow refers to the total amount of money that comes into your business through sales, and leaves your business through your expenses.

Cashflow management is the act of tracking this money. It’s a crucial function that supports regular and sustained business growth.

Without good cashflow management, any business is running blind. You won’t know how much money you have, how much is expected to come in, or how much money you need to pay your suppliers and staff.


Having a clear record and forecast means you can retain a positive cashflow – or identify negative cashflow well in advance, allowing you to take action to remedy and avoid financial difficulty.

Maintaining good cashflow management isn’t just about helping you get by day-to-day. As time goes by, it will provide an invaluable pool of insights and data into your business to support forward-planning. Importantly, a reliable cashflow forecast will also identify what funds are available for you to re-invest in your business to drive the next stage of growth.

Here are my three key pieces of advice on how to improve your business’ cashflow management.

1. Create a cashflow forecast

First things first, if you don’t already have a cashflow forecast set up, make this a priority. A cashflow forecast estimates the amount of money flowing in and out of your business, in turn acting as the roadmap for your business to tell you where you’re going. With a thorough cashflow forecast, you can plan effectively for the future.

Using this historical data, you can estimate your projected incomings and outgoing, and be better prepared for the highs and lows that come with running a business. Now more than ever, financial resilience is crucial to businesses.

2. Take more control over your payment cycles

Simple tips and tricks can have a profound impact on your cashflow. For example – paying your invoices on the due date, rather than date supplied, will enable you to keep funds in your account for longer. The longer funds sit in your account, the more daily interest they will generate. These small amounts of interest add up and are an effortless way to increase your income.

In addition to this, consider setting up payments policies with your suppliers that work for you. Strong cashflow management will show you when you are best positioned to pay off expenses. Use this insight to negotiate payment cycles for 30-, 60- or 90-day windows that best match the needs of your business. Perhaps even more importantly, effective cashflow management will provide you with long-term projections for when payments are due so there are no nasty surprises.

3. Embrace modern financial platforms, technologies and practices

Finance has typically been one the slowest areas to adjust to and adapt modern technologies. But as we enter a new decade, this is beginning to shift. In the same way other industries have embraced innovation and technology to identify efficiencies and deliver savings, the same applies to financial management.

As the world becomes more borderless, transactions across countries are becoming more prevalent. Banks used to be the go-to to support these types of payments – but peer-to-peer payment service providers are now in the market offering the same service to individuals for a fraction of the cost, and often supporting instant payments.

If you are using the big banks to run international payments, you probably are spending 4-5% more than you need to. This challenge was the genesis for Airwallex. Two of my co-founders ran a café in Melbourne’s Docklands, but were getting stung by huge international transaction fees when importing goods, such as coffee cups, from overseas. They said enough was enough, and from there, Airwallex’s platform was born.

Since then, we have helped many small businesses in Australia reduce their costs and scale globally. These capabilities are available instantly on our digital platform, which means that small businesses do not need to travel to specific locations to open accounts, as they would with a bank.

Using other electronic payment methods, such as through a card or peer-to-peer payment service, provides a similar service to paying an invoice on the due day. The benefits it offers you is speed; electronic payments allow you to pay on time. Some services, like credit cards, even offer rewards for using their services.



Good cashflow is king and the key to sustainable business growth. A positive cashflow projection will give you and your business the confidence to maximise the opportunities during the good times, and survive times of uncertainty and turbulence.

Lucy Liu is the Co-founder and President at Airwallex.

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