Nick Chandi is the CEO of Forwardly, an award-winning B2B payment platform that helps US businesses send and receive payments faster.
When you start a business, the excitement of chasing new customers, building a groundbreaking product and dreaming big often overshadows the less glamorous business operations. In the early days of just starting, you’re so focused on growth that managing payments and cash flow can feel like an option … until all of a sudden, it’s not.
The truth is that cash flow is the lifeblood of your startup. And if you don’t get a grip on it early, it can quietly kill even the best ideas.
The uncomfortable truth: Growth burns through cash.
Growth burns through cash, fast. It’s one of those tough realities no one talks about enough when you’re chasing new customers, hiring or scaling up. According to SCORE, 82% of small-business failures are due to cash flow issues. Not market demand. Not bad ideas. Simply running out of cash.
When you’re growing fast, expenses hit before revenue lands. You hire new people, sign up for tools, stock inventory and invest in marketing, all before your invoices are paid. That lag is dangerous.
In my own experience building my company, I quickly learned how critical it was to speed up incoming payments and slow down outgoing ones without stalling momentum. It’s a balancing act, but it’s doable if you stay proactive.
Late payments are a silent killer.
Late payments don’t just slow you down; rather, they strangle your cash flow. A QuickBooks survey found that over 70% of small businesses experience late payments. Even worse, 48% said those delays directly hurt their ability to grow.
It’s frustrating. You do the work, send the invoice and then … wait. And wait. One practical thing I recommend is to start tightening your invoice payment terms and being more proactive about follow-ups. Sometimes it’s uncomfortable chasing money, but if you don’t prioritize getting paid, no one else will.
Humans have come to expect convenience in every aspect of their lives, including how they handle transactions and payments. The easier it is for them to pay, the quicker they’ll get around to it. Offering multiple payment methods, whether it’s instant bank transfers, credit cards or same-day ACH payments, increases the chances of getting paid on time. If a client can pay you in a way that’s convenient for them, they’re much more likely to do so promptly.
Relying on traditional payment methods like checks or regular ACH transfers can create delays. To speed up payments, consider adopting faster payment methods. Tools like automated accounts receivable (AR) systems can streamline the payment process. With an AR automation system, you can send invoices, set up automatic payments and offer an online payment portal for clients to pay instantly. This reduces the back-and-forth and removes the need for constant follow-ups.
If you don’t know your numbers, you don’t know your business.
I’ve worked with founders who knew everything about their customers and product road map but nothing about their burn rate or cash runway. It’s a dangerous blind spot. Budgeting is exactly knowing what’s coming in, what’s going out and how long you can keep the lights on.
Start by reviewing your cash position every single week. Track how much cash is available, what payments are scheduled and what revenue is expected to come in. Create a simple rolling cash flow statement that tracks inflows and outflows for at least the next eight to 12 weeks. This should include invoices issued, expected payment dates, rent, software subscriptions, vendor bills and loan repayments, and so on. If a gap is coming, it’ll show up here first.
Know your largest expenses and where your biggest risks lie. Are payroll costs eating up 60% of your monthly expenses? Is one major client responsible for half your income? Are you carrying recurring charges for services you barely use? Map this out. Every business has a few big-ticket items and dependencies that drive financial outcomes. The earlier you identify them, the faster you can manage risks.
When it comes to revenue, track the exact timing of cash inflows. Just because a client signed a deal doesn’t mean you have cash in hand. Track when invoices are sent, the payment terms and when the funds land in your account. Delays here can quickly choke your cash flow. Many businesses fail because they run out of cash while waiting for receivables.
On the outflow side, prioritize payments based on urgency and impact. Fixed costs like rent and payroll should be covered first. Discretionary spending can often be delayed, reduced or renegotiated. If your cash flow is tight, communicate with vendors early. Most suppliers appreciate transparency and would rather work with you on a payment plan than chase unpaid bills later.
Finally, stress-test your numbers. What happens if your biggest client delays payment by 30 days? Or if sales drop by 20% for the next three months? Run these scenarios and see how long you can keep operations going without new income. Knowing your worst-case scenario and having a response plan in place removes panic from tough situations.
Not all growth is good growth.
It’s easy to get caught up in chasing rapid expansion for the wrong reasons: to impress investors, fuel social media hype or simply for the adrenaline rush of bigger numbers. But here’s the truth I’ve learned over the years: Growth without financial discipline is reckless.
Before jumping into any new opportunity, you need to pause and ask yourself some questions: Will this customer pay on time? Is this deal truly profitable after factoring in all the costs? Are we committing to expenses we realistically can’t cover yet? Can we scale this without putting the entire business at risk?
According to research by CB Insights, 38% of startups fail not because of weak demand but because they run out of cash, a problem that can often be avoided with tighter financial controls and smarter decision-making. In my experience, controlled, sustainable and profitable growth always beats aggressive scaling. It’s not about how fast you can grow but more about how long you can keep growing without jeopardizing the business you’ve worked so hard to build.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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