Introduction: The Cash vs. Profit Reality
Quick question, do you ever look at your profit and wonder why the bank balance still feels tight? You are not crazy. Profit and cash are cousins, not twins. Cash flow management is the quiet system that turns busy months into stable months, and it is the difference between sleeping well and staring at the ceiling at 2 a.m. Ready to make cash feel calm?
Why This Matters for Texas Businesses Right Now
Growth across Texas is real, which is great, until sales tax, payroll, inventory, and quarterly taxes all hit in the same two weeks. Vendors want to be paid, customers take their time, and banks ask for statements before renewing a line. If you run a food truck in Houston, a clinic in Dallas, a shop in San Antonio, or freelance from Austin, the pattern is the same: cash in, cash out; the timing makes or breaks your month. With a few steady habits, you can smooth the bumps, keep the lights bright, and stop using tomorrow’s money to solve today’s problem.
The Simple Answer
Cash flow management means three things:
- Make cash arrive sooner
- Make cash leave later without damaging relationships
- Know your next 13 weeks before they happen
If you do those three well, profit turns into cash in the right weeks, not just on paper at year end
Speed Up the Money You Are Owed
Invoice the same day: When the work is done, send the bill immediately. Waiting until Friday trains clients to wait too. Most accounting tools let you send from your phone with online payment links that remove friction and shave days off collection times.
Get deposits and milestones: For projects or large orders, ask for 30 to 50 percent up front, then milestone payments. It funds labor and materials, and reduces risk on both sides.
Offer early pay options: A small discount for early payment can be worth it if your margin supports it. Faster cash beats small top line on paper when you need to make Friday payroll.
Make paying easy: Offer ACH, cards, and digital wallets. Automate reminders at 7, 14, and 21 days. Friendly, consistent nudges work better than one stern email at 45 days.
Slow the Money You Send, the Smart Way
Use terms you already have: If a vendor offers net 30, net 45, or net 60, use them. Pay on the due date, not the day the bill arrives, unless there is a strong early pay discount.
Segment vendors: Payroll, taxes, rent, and utilities are non-negotiable. Everything else is flexible with communication. Call vendors early if you need a short extension.
Consider leasing over buying: For equipment that does not drive revenue immediately, leasing spreads the cost and preserves cash for working capital. Run the math on total cost, then decide with eyes open.
Free Up Cash That Is Stuck on Your Shelves
Manage inventory like cash: Every extra pallet is money parked. Review turnover monthly, identify slow movers, and adjust purchasing to sales velocity. Set reorder points for A items, and buy C items less often. Use just-in-time where it makes sense.
Discount with intention: Clearing slow stock at a small margin hit can be smarter than letting it gather dust. Be surgical. Discount the right SKUs, not the whole store. Freeing funds from stale stock can pay for seasonal hires or new ad tests.
Use a 13-Week Cash Flow to See Around Corners
A 13-week cash flow is a simple weekly forecast of cash in and cash out over the next quarter:
How to build one:
- Start with opening cash: Reconcile your bank balance so the starting number is real.
- List expected cash receipts by week: Invoices due, card settlements, retainers, seasonal sales spikes
- List expected cash disbursements by week: Payroll, rent, loan payments, vendor bills, sales tax, franchise tax, and quarterly estimates
- Calculate net cash each week: Opening cash plus receipts minus disbursements equals ending cash. Ending cash becomes next week’s opening cash
This tool surfaces reality fast. Keep it updated weekly and use it to make decisions, not just to admire the numbers.
Protect Yourself With a Reserve and the Right Credit
Build a cash reserve: Aim for three to six months of essential operating expenses. Start small, then add a percentage of profit each month. Keep it in a high-yield business savings account.
Secure a line of credit before you need it: Banks lend to the prepared. Put a line in place when cash is strong and statements are clean. Use it sparingly for timing gaps, then pay it down quickly.
Keep Your Bookkeeping Tight, Because It Feeds Cash Decisions
Reconcile weekly: Bank and card accounts should match your ledger every week. This keeps your 13-week forecast honest.
Track sales tax separately: Sales tax is not your cash. Map it to a liability account. Reconcile it monthly and remit on time.
Watch AR and AP aging: Set thresholds. If an invoice hits 15 days past due, make a call. If a vendor bill is due in seven days, include it in this week’s schedule.
Industry Examples, Texas Style
Construction and trades: Use progress billing with deposits and milestone payments. Align supplier terms with client payments.
Retail and e-commerce: Sync inventory data with sales. Cut orders for slow movers. Negotiate better freight and regional carriers. Offer buy now, pay later to customers if it accelerates cash.
Professional services and creative: Use retainers for ongoing work. Switch to value-based pricing when hourly billing underprices expertise. Automate invoicing and late reminders. Offer ACH for faster settlement.
Restaurants: Forecast menu item demand, adjust prep, and reduce waste. Match labor to sales. Negotiate with suppliers on pack sizes to avoid overbuying perishables.
Quick Wins You Can Do This Week
- Shorten invoice terms from net 30 to net 15 for new clients. Add an early pay discount for larger invoices
- Turn on online payment links and automated reminders in your invoicing tool
- Call your top three vendors to ask about extending terms or securing early pay discounts
- Build a first draft 13-week cash view. Adjust bill timing and collections around tight weeks
- Open a separate savings account labeled Emergency. Move a small, fixed amount there every Friday
Where Professional Help Fits
If cash has been bumpy, a short engagement with a bookkeeper or part-time CFO can reset your system. They will clean your AR process, set vendor payment calendars, and build a 13-week model your team can maintain. Small changes, done consistently, make the biggest difference.
A Calm Way to Finish
Cash flow management is not glamorous. It is the habit that keeps your business sturdy. Speed up the dollars coming in. Slow down the dollars going out, with respect. See your next 13 weeks before they happen. Do those three, and you will feel the shift. Fewer fires, better sleep, and more freedom to say yes to the good stuff.
