Updated Strategies to Improve Cash Flow in 2025

The need for more cash flow is nothing new. But the strategies for achieving more cash flow in 2025 are certainly new. In addition to the normal quantitative features and approaches, qualitative factors are going to be equally — if not more — important in achieving cash flow success. 

Bringing qualitative and quantitative strategies together to boost cash flow and revitalize your workforce will be a defining factor for success this year. 

Focus on the Quantitative 

Achieving cash flow success requires a solid plan, effective execution, performance monitoring, and the flexibility to adjust strategies and pivot when necessary. A rolling cash flow forecast and detailed budget-to-actual variance can help drive accountability and increase efficiency. By concentrating on increasing cash flow and optimizing returns rather than placing blame, organizations can develop better managers and improve the bottom line. 

Gross Margin Excellence 

One of the cores of great cash flow is gross margin excellence. Consider the following items as part of your strategic approach and review progress monthly with your financial statements: 

• Optimize throughput 
• Rationalize overtime 
• Reduce waste 
• Increase accountability 
• Assess key supplier pricing and terms 
• Provide a “bonus pool” to your team for excellence beyond milestones 
• Enhance inventory turnover 
• Improve AR aging 
• Determine where you have the most influence 

If you don’t already, be sure to include these attributes in a key performance indicator (KPI) monthly report. If you incorporate these attributes into your plan, you could increase gross margins by 2% to 3% per year. 

Optimize Your Lender Partnership 

If your organization is a borrower, then your lender relationship is important. To get the most out of your lender relationship you should treat your lender as a partner, and vice versa.preferred partner. 

Lender and borrower meetings should be scheduled at the end or beginning of each year. Common topics include future possibilities and anticipated threats/vulnerabilities. As a borrower, you should communicate your current position, program, goals, execution plan, and what you expect from your lender. 

Remember, your lender benefits financially from lending more. The best time to ask for more capital is when your organization is doing well and doesn’t seem to need it. However, if you are in a transition period, encountered a hiccup in the last year, or are in a turnaround or restructuring phase, the plan details you provide to your lender can make the difference needed to get back on track. 

Clearly convey the following to your lender: 

• How much do you need? 
• For how long is it needed? 
• What rate and fees can you afford to pay? 
• When will the loan be paid back? 
• What is the business plan to address the aforementioned questions? 

Being able to answer these questions shows your request is serious. 

Drive Change with Qualitative Factors 

Digital Presence 

Reassessing your organization’s website and social media presence on a continuous basis is the key to driving successful change. This includes the functionality of your platforms and analyzing whether you are driving customers to act with strong calls to action. Consider how often you are posting and your click through rate (CTR). You want to find the right balance of posting just enough content as to not over or underwhelm your audience. 

Feedback 

Your organization should cater to what your audience, stakeholders, and customers are looking for, and you should always keep them in mind. Assess the effectiveness of your current practices by asking your customers for feedback. This feedback will highlight where your organization has room for growth. Getting feedback from stakeholders on whether you are delivering the promised results is crucial information to know to grow and maintain long term success. 

Technology 

The most successful companies during the pandemic leveraged seamless transitions from in-office to work from home environments due to the technology they already had in place. Having both a strong cybersecurity plan and technology program are necessary to stay up to date. With the expanding capabilities of AI, top technology trends will continue to evolve. The best thing your organization can do is prepare for it. 

Proactive Assessments 

Your organization should regularly assess marketing and business development programs. The approach, vision and path taken for both segments will likely be a correlation for your organization’s success. Regular assessments allow you to make minor adjustments and align with your organizational goals. Overall, proactively tracking performance and operations will set your organization up for success. 

Cultivating Strong Company Culture 

Company culture is more important than ever. Cultivating a culture of empathy, humility, and self-awareness leads to long term partnerships with your clients. Successful organizations develop culture starting from the top down. Their leaders are trusted, respected in the marketplace, and lead by example. 

Successful organizations show clients how they care rather than tell them, work to establish genuine client relationships, and communicate transparently. A culture built on genuine core values helps your organization build client trust and develop relationships with transformative outcomes. 

Leveraging Opportunities 

Navigating the current cash flow landscape is going to take more effort, patience, and leadership than ever. The private equity sector is rapidly expanding, and there are opportunities for failed deals, turnarounds, restructurings, quality of earnings, healthy and distressed sales, and so on. With a thoughtful approach, your organization and stakeholders will be well-positioned for success. If you need help assessing cash flow, bankruptcy and restructuring strategies, lender relations, or other factors related to business health, contact us below to start a conversation.