Start 2026 strong: A Business Owner’s Guide to Improving Cash Flow
Cash(flow) is king. Here’s how to unlock stronger cash flow this year.
Key takeaways:
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Strong cash flow forms the foundation for resilient businesses — but cash flow problems are extremely common.
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Improving cash flow starts with tightening up Accounts Receivable practices and making it easier to get paid faster.
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Businesses can also improve cash flow by diversifying their business to create new revenue streams or scaling during peak season to boost revenue.
After a turbulent 2025, with the potential for more uncertainty ahead, business owners are looking for every opportunity to build resilience within their company.
One of the most effective ways to do that is by strengthening cash flow. Having cash on hand affords you options: a buffer that allows you to act strategically as business ebbs and flows, resources to manage unexpected challenges, and capital you can reinvest to fuel growth.
Yet working capital remains a top challenge for many business owners, says Jason Wilson, a Northwest Small Business Banker based in Lebanon, PA. “I don’t know of any business that hasn’t had working capital issues that they could improve on. But it’s also a solvable problem that can significantly strengthen your business.”
Here, we’ll discuss strategies and tactics for business owners to strengthen their cash flow — and build the financial resilience needed to grow.
Start with insights into your cash flow
Despite its importance, cash flow issues can be surprisingly difficult to spot. “It’s easy to fall into the trap of generous payment terms with customers, where you’re waiting 90 to 120 days for payment,” Wilson says. “But that can result in millions of dollars worth of sales sitting in limbo, while you’re lying awake at night worrying about making payroll.”
This paycheck-to-paycheck approach may still support your business when times are good, but it leaves little margin for error if the business hits a setback. A good first step is working with an accountant to calculate your Days Receivable Outstanding (DRO) — the average number of days it takes customers to pay their invoices.
From there, look for opportunities to shorten payment terms and onboard new customers with net 30 or net 60 payment terms. “Shorter accounts receivable timelines enable banks to provide a capital injection when you need it, because you’re able to pay them back quickly,” Wilson explains.
Make it easy and convenient for customers to pay quickly
As Millennials and Gen Z become key consumers and B2B buyers, flexible digital payment options are no longer optional. Offering modern payment methods can help attract customers while also improving cash flow.
Accepting credit card payments or ACH transfers, for example, helps businesses sidestep the delays associated with receiving, depositing and clearing traditional checks. Plus, some institutions may help you access your funds within 24 hours — especially when merchant services and business banking are housed in the same place.
“There’s often something the bank can do to help you access your money more quickly: Helping you understand the timelines around different payment types, helping you optimize your strategy or connecting you to the right accounts and payment solutions to support your business,” Wilson says.
Businesses can also bolster cash flow by offering early-pay discounts or rewarding reliable, fast-paying customers with preferred pricing or terms. And during a cash crunch, it may be worth having direct conversations with your most loyal customers. “Customers who understand your value will often do what they can to help,” Wilson notes.
Consider diversifying your business to unlock additional revenue…
Seasonality places unique pressures on cash flow management, so Wilson highlights the importance of diversified revenue streams to build financial resilience.
“I’m seeing more and more businesses thrive by deploying new revenue streams. If you’re a landscaping business, focusing on snow plowing in the off-season helps you keep the lights on,” he says. Similarly, a pizza restaurant might diversify its business with a breakfast or brunch menu, while a trucking company that employs auto mechanics may offer truck maintenance services to nearby businesses.
Diversification can take other forms, too — like expanding your brick-and-mortar retail business with eCommerce or selling on social media marketplaces, or rebranding to attract a broader customer base.
“No matter which avenue you ultimately choose, diversification is about finding new ways to leverage the unique strengths and capabilities within your business,” says Wilson. “For the right business, this can be one of the best ways to unlock new growth.”
…Or double down on your core strengths
Diversification isn't the only way to manage seasonality. Some businesses are better served by maximizing revenue during their busy season and building a sufficient cash buffer to carry them through the slow periods.
“Diversification isn’t for everyone: Depending on the business, it might take a massive amount of effort to realize incremental gains, compared to simply scaling to do more business during the on-season,” Wilson says.
This approach requires careful planning and financial forecasting. Business owners may need to expand capacity, hire seasonal staff, and, most importantly, manage cash effectively to ensure they have enough runway until the next busy period.
“That’s where working with your bank can be really helpful. We can go through what seasonal scaling might look like in your business, and determine how much you’ll need to set aside to weather seasonality,” he says. “That way, you can go in with your eyes open, confident this is truly the best strategy for you."
We’re here to help you strengthen your cash flow — now and for the future
If you’re currently facing a cash crunch — and the sleepless nights that can come along with it — you’re far from alone. But that doesn’t mean you need to accept it as the norm. Our dedicated business banking team is here to help bring peace of mind.
“We don’t know your business as well as you do, but we do know business finances — and we often know what’s worked for businesses similar to yours in the past,” Wilson says. “It’s my job to be a trusted sounding board as you set goals for your business and map out your path forward. The most rewarding aspect of my work is helping business owners reach their goals.”
Our team of business banking experts is here to help you identify issues impacting your cash flow and help you find the best next step. When you’re ready, fill out the form below to connect with an expert and start the next phase of your journey.
