The second cause of poor cashflow – Your accounts payable process

Cashflow Fix: Get Control of Your Spending and Supplier Terms

Cashflow often tightens not because sales are weak, but because of when and how money leaves your business. A clear spending plan and well-managed supplier terms make a real difference.

Set (and Use) Practical Spending Budgets

Build an annual budget before the new financial year and revisit it quarterly.
Give budget holders clear limits and rules for ordering products and services.
Track actuals vs budget by department so overruns are spotted early.

Simple controls — like purchase order approvals and monthly reviews — help keep spending aligned to plan.

Document Your Accounts Payable Process

Map the flow from ordering to payment. A short, written process helps your team follow the same steps every time and reduces errors and delays.

Ordering: who can order, required quotes, and approval thresholds.
Receipt: matching invoices to POs and delivery notes.
Payment: payment runs, cut-off dates, and segregation of duties.
Review: spot checks for duplicates, fraud flags, and missed discounts.

Review Supplier Terms and Pricing

Schedule a quick supplier review at least yearly (or when costs shift):

Terms: payment due dates, early-payment discounts, late fees.
Risk: insurance, warranties, service levels, and delivery reliability.
Competitiveness: compare current suppliers with alternatives, factoring in freight, minimum orders, and discount structures.

If you are missing prompt-payment discounts or slipping past due dates, look for ways to free up cash elsewhere so you can pay on time and protect supplier relationships.

Quick Wins to Improve Cash Outflows

Move to scheduled weekly or fortnightly payment runs.
Use PO numbers and 3-way matching (PO, receipt, invoice).
Enable early-payment discounts in your payables calendar.
Separate who sets up suppliers from who approves payments.
Use alerts for duplicate invoices and unusual amounts.

Need a Hand?

We help small and growing businesses improve cashflow with practical systems — not red tape. Book a Cashflow & Profit Improvement Meeting and we will review your payables process, highlight quick wins, and set up a simple plan to manage outflows more effectively.