6 Strategies to Improve Cash Flow Management as CFO
Effective cash flow management is crucial for the financial health of any organization. This article presents expert-backed strategies that CFOs can implement to optimize their company's cash flow. From tightening accounts receivable to implementing milestone-based invoicing, these insights offer practical solutions for maintaining robust financial liquidity.
- Tighten Accounts Receivable for Improved Liquidity
- Implement Milestone-Based Invoicing for Steady Cash
- Establish Weekly Cash Flow Forecasts
- Collect Upfront Deposits and Progress Payments
- Require Full Payment Upfront for Bookings
- Create Rolling 12-Week Cash Forecast
Tighten Accounts Receivable for Improved Liquidity
One strategy I implemented early on was tightening up our accounts receivable process. We moved to a more proactive approach by setting clear payment terms, collecting deposits to cover late payments, offering additional payment methods, and increasing follow-ups on overdue accounts. We also integrated better software to automate invoicing and reminders. This ensured we were on top of things without burdening the team with manual tasks.
The impact was significant. Our days sales outstanding (DSO) dropped by over 15%, freeing up cash that was previously tied up in receivables. This liquidity boost gave us more flexibility to reinvest in growth.
My advice to others is to start by understanding where the bottlenecks are in your cash flow. Often, it's in receivables, but it could be elsewhere. Use technology to streamline processes and always keep communication clear and professional with your clients.

Implement Milestone-Based Invoicing for Steady Cash
One of the more effective strategies I implemented at Spectup was moving away from traditional long billing cycles and introducing milestone-based invoicing tied directly to deliverables. It sounds simple, but the impact was immediate—smoother cash inflow, fewer client delays, and better alignment between work done and money received. I remember early on, we had a few projects where 80% of the work was done, but 0% of the invoice was paid. It was frustrating, and frankly, it didn't reflect the value we were delivering in real time. So, we restructured contracts to include payments at defined checkpoints, like after pitch deck completion or once investor outreach kicked off.
Clients actually appreciated the clarity, and our team felt more motivated knowing their efforts were being acknowledged financially along the way. For others thinking about doing the same, don't overcomplicate it—just map your project phases to clear, outcome-driven invoices. It improves predictability and avoids the end-of-project payment anxiety that eats up way too much headspace.

Establish Weekly Cash Flow Forecasts
One strategy I implemented to improve cash flow management was setting up a weekly cash flow forecast. This allowed us to track incoming and outgoing cash on a granular level, helping us identify potential gaps early. We also began streamlining our invoicing process, ensuring that payments were due within shorter, more consistent timeframes. As a result, our cash flow became more predictable, and we reduced instances of late payments. The impact was noticeable—within six months, we saw a 20% reduction in outstanding receivables and improved our liquidity. My advice to others is to stay proactive. Regularly monitor your cash flow and keep an eye on trends, so you can adjust quickly if necessary. Also, communicate with your team about the importance of maintaining cash flow discipline across departments—it's a company-wide effort.

Collect Upfront Deposits and Progress Payments
Cash flow is the lifeline of this business. I don't care how many jobs you book—if you don't control your cash, your business can sink fast. One strategy that changed everything for me? We started collecting deposits up front and tied progress payments to clear project milestones.
Before this, we'd finish the job and then wait weeks chasing checks. Homeowners were slow to pay, insurance payouts were delayed, and meanwhile, I was paying out-of-pocket for materials, labor, and dump fees. It strained everything—payroll, supplier relationships, even my peace of mind.
So we made it a policy: 30% deposit up front, another 40% once materials are delivered and work begins, and the remaining 30% upon completion. It's clear, it's fair, and we don't lift a shingle until the first deposit hits.
This move did three things:
1. It stabilized our cash flow. I'm not fronting thousands before a dime comes in.
2. It filtered out unserious clients. If someone won't commit with a deposit, they usually aren't ready.
3. It improved supplier relations. With cash flowing predictably, I could pay on time, get better pricing, and build trust.
My advice to others? Don't be afraid to ask for money up front. You're not a bank, and your crews don't work for free. Tie payments to work, not promises. Get it in writing. And most importantly—stick to it. Don't make exceptions or you'll go right back to cash flow hell.
You can't grow your business on hope. You need systems that protect your bottom line. This one saved mine.
Require Full Payment Upfront for Bookings
A great strategy I introduced as CFO of Mexico-City-Private-Driver.com was that we changed our entire process to require full payment upfront for any and all bookings, and we created an embarkation fee tier for cancellations and refunds depending on how long before the ride the client cancelled. This felt risky at first because luxury-minded clients often feel entitled to flexibility. However, after we communicated our value (fully vetted drivers, experience, clean vehicles, selectivity of fixed prices, inbox and overnight phone support in English and Spanish), the conversation of "what if I cancel?" changed to "oh, I am confident securing this service is worth the commitment."
The change was a huge advantage: we transitioned from uncertain and unpredictable last-minute cash gaps to knowing exactly how much revenue we would have at least 48 hours before our anticipated rides. It practically eliminated our driver no-show rate (for instance, two no-shows in the initial month of booking) and driven up predictable and planned bookings. It also afforded us to generally negotiate better terms with our fuel and insurance costs, as the cuts and peaks in cash flow reduced in comparison to certain previous months.
For others who are engaged in business to service clients: please do not be afraid to ask for pre-paid services. If you don't have a booking system fully outlining your value in explicit manners, make it so blatantly obvious your clients will want to commit. Apply its value in a booking system that provides peace to your clients (i.e., ours has clear origin/destination and instructions for pick up and drop off including number of passengers, luggage confirmation...), sense of urgency from your own confirmation booking, and detailed additional details with terms, with added empathy towards his/her concern of change. Your clients are purchasing this value, not just "the ride." They are purchasing security of not having to worry.
We changed the operational space and time, and mutual trust and respect levels changed - it was the most effective cash flow strategy I would do again with zero regret.
Create Rolling 12-Week Cash Forecast
At Ridgeline Recovery, managing cash flow isn't just about protecting the bottom line—it's about protecting the mission. In our space, delays in insurance payments or fluctuations in census can put real strain on operations. You can't deliver consistent care with inconsistent cash.
One strategy that's made a significant difference: we implemented a rolling 12-week cash forecast. Instead of focusing solely on the monthly P&L, we started projecting inflows and outflows every single week—based on real-time billing data, payroll timing, vendor schedules, and known variables like holidays or audit cycles. That gave us visibility beyond a snapshot. It gave us a runway.
Our process starts with our finance and billing team reviewing current receivables, pending reimbursements, and any operational changes that could impact spending. Every Thursday, we update projections and share a summary with leadership—not just the finance department. That transparency keeps everyone aligned. It's not about pointing fingers; it's about planning better.
This shift helped us avoid a staffing freeze during a quarter when reimbursements were delayed. It also allowed us to renegotiate payment terms with vendors early, rather than scrambling when cash got tight. Most importantly, it kept client care uninterrupted. That's the standard we hold ourselves to—our financial systems need to support our clinical integrity.
My advice? Don't just look at your bank balance—understand your cash rhythm. Map it week to week, and build processes that keep your team proactive instead of reactive. And never let your financial planning happen in a silo. In healthcare, every dollar has a purpose. Make sure your systems reflect that purpose.