Strategies to Stretch your company's cash

A business doesn’t fail because it lacks funding—it fails when it runs out of cash. Cash is the lifeblood of business. While fundraising and revenue growth grab headlines, cash management determines survival—especially in unpredictable markets.

Cash flow crunches hit businesses at every stage—startups, scale-ups, and enterprises alike. Whether caused by slow receivables, rising costs, or market downturns, knowing how to maximize cash is a must-have skill for any founder or CFO.

This guide breaks down actionable strategies to optimize cash flow, build financial resilience, and keep operations running smoothly.

1. Diagnose Your Cash Position

Before making changes, first understand where you stand. That means tracking real-time financial data and maintaining disciplined cash flow management.

Key Actions:

• Conduct a Cash Flow Audit – Review historical cash inflows and outflows to identify patterns and inefficiencies.
• Create a Rolling 13-Week Cash Flow Forecast – Unlike traditional static projections, this dynamic model provides granular visibility into upcoming cash needs.
• Identify Liquidity Gaps – Assess whether upcoming expenses will exceed available cash and at what points intervention is necessary.

Having real-time cash flow visibility enables you to take proactive, rather than reactive, measures.

2. Optimize Accounts Receivable to Accelerate Inflows Without Hurting Relationships

Slow-paying customers drain cash. Instead of waiting, take control—speeding up receivables ensures consistent inflows without damaging relationships.

Key Strategies:

• Shorten Payment Terms – 

If possible, reduce net payment terms from 60 days to 30 days or introduce milestone-based payments.

• Incentivize Early Payments – 

Offer small discounts (1-2%) for payments made within 10 days. This marginal cost is often outweighed by the benefits of quicker cash inflows.

• Implement Automated Invoicing & Collections – 

Use software like QuickBooks, Xero, or Chargebee to send automated reminders, reducing manual follow-ups.

• Leverage Invoice Financing – 

In tight cash situations, factoring or invoice discounting can provide immediate liquidity.

By optimizing collections, you ensure a steady and predictable inflow of cash.

3. Manage Accounts Payable to Stretch Outflows Without Damaging Supplier Trust

Cash flow isn’t just about bringing money in—it’s also about managing how it goes out. Smart payables management extends the cash runway while keeping suppliers happy.

Key Strategies:

• Negotiate Better Terms – 

If you currently pay vendors within 30 days, try negotiating for 45-60 day terms. Some suppliers will agree, especially if you have a strong payment history.

• Consolidate Vendor Agreements – 

If you work with multiple suppliers for similar services, consolidate spending to negotiate bulk discounts and better terms.

• Use Corporate Credit Cards Strategically – 

Pay suppliers via business credit cards with a 30-45 day billing cycle, extending your cash outflow timeline while earning rewards.

• Prioritize Critical Payments – 

Classify expenses into essential (payroll, rent, core inventory) and non-essential (marketing, travel, discretionary software subscriptions) to allocate cash wisely.

By smoothing out payment obligations, you gain flexibility to manage liquidity effectively.

4. Reduce Unnecessary Expenses: 

Cost-cutting is often associated with layoffs, but smart reductions focus on inefficiencies rather than core growth drivers.

Key Strategies:

• Audit All SaaS Subscriptions – 

Many companies overspend on software. Eliminate unused licenses or switch to annual billing for key tools.

• Renegotiate Fixed Costs – 

Discuss rent reductions, utility plans, and outsourced service agreements to find savings.

• Eliminate Overlapping Expenses – 

Consolidate multiple software solutions or redundant team functions.

• Reduce Discretionary Spending – 

Cut non-essential travel, excessive perks, and luxury office expenses without impacting operational efficiency.

The focus should be on operational efficiency, not blanket cost-cutting that undermines growth.

5. Monetize Underutilized Assets

Many businesses have idle assets that can be monetized. These range from unused office space to excess inventory and intellectual property (IP) licensing opportunities.

Key Strategies:

• Lease Out Extra Office Space – 

If your company has downsized its physical footprint, subleasing part of your office can generate additional revenue.

• Sell Excess Inventory – 

Identify slow-moving products and sell them at a discount to recover cash.

• License Proprietary Technology – 

If your company has developed valuable patents or proprietary software, licensing it to others can generate non-dilutive cash flow.

Leveraging existing assets for cash flow optimization is often overlooked but can yield significant returns.

6. Strengthen Banking & Financing Strategies

When cash is tight, the right financing strategy can provide a cushion without creating long-term financial strain.

Key Strategies:

• Set Up a Line of Credit Before You Need It – 

Secure an LOC from your bank when your balance sheet is strong, not when you're already facing a cash crunch.

• Explore Revenue-Based Financing – 

Instead of traditional loans, consider financing tied to a percentage of revenue, which aligns with business performance.

• Negotiate Debt Refinancing – 

If you have high-interest loans, refinancing to lower rates or longer repayment terms can ease short-term cash burdens.

A well-structured financial buffer ensures resilience during downturns.

7. Build a Proactive Cash Culture

Cash management isn’t just a finance function—it requires alignment across sales, operations, and leadership to foster a cash-conscious mindset.

Key Actions:

• Educate Teams on Cash Flow Impact – 

Ensure department heads understand how spending decisions affect liquidity.

• Incentivize Profitability Over Revenue Growth only– 

Shift focus from growth metrics only (GMV, ARR growth at all costs) to sustainable profitability.

• Implement Real-Time Cash Monitoring – 

Utilize dashboards to track cash burn, runway, and liquidity position in real-time.

When cash efficiency is embedded in company culture, financial resilience follows.

8. Hire a Fractional CFO for Expert Financial Oversight

For companies without in-house financial expertise, hiring a fractional CFO team can be a great strategy. A fractional CFO team brings expertise in cash flow management, financial planning, and strategic decision-making without the overhead of a full-time hire. 

At Alehar, we specialize in providing tailored fractional CFO services designed to help businesses optimize their financial operations, improve cash flow, and prepare for significant financial events such as fundraising or M&A. Our team offers strategic financial advisory, including financial modeling, forecasting, and budgeting, to support your company's growth and financial stability.

Conclusion

Companies that stretch cash intelligently build financial strength that allows them to outlast competitors and capitalize on opportunities. Implement these strategies, and your business won’t just have a longer runway—it will have the strategic agility to thrive in most market conditions. The best CFOs and founders don’t wait for crises to start managing cash efficiently. They build cash resilience into their operations from day one.

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