January is the month of resolutions. February is the month of execution. And in business, execution means cash flow.

A business that doesn’t manage its cash flow is like a ship without a rudder. No matter how fast it sails, it’s bound to drift into trouble. That’s why now is the time to take a hard look at our debtors list—who owes us money, when we expect to be paid, and what we’re doing to collect.

In the intricate dance of business, cash flow is the rhythm that keeps everything in step. Yet, many enterprises, even those with promising products and rapid growth trajectories, stumble when this rhythm falters.

Understanding the pivotal role of cash flow management is essential to prevent becoming part of a sobering statistic: 82% of small businesses fail due to poor cash flow management or a lack of understanding of cash flow.

This isn’t just about money coming in and going out; it’s about timing, forecasting, and control. And when a business expands rapidly—scaling operations, entering new markets, or launching new products—its risk of cash flow failure skyrockets.

So, let’s break it down in a way that every business owner should: WHO, WHAT, WHEN, WHERE, HOW.

WHO – Who Owes You Money?

Not all customers are created equal. Some are reliable payers, others need a nudge, and then there are those who make you chase every cent.

  • Do you know which category your clients fall into?
  • Are you treating them all the same?

Successful businesses segment their debtors. Your best customers pay on time. Your worst ones need to be managed properly—or dropped altogether.

If you’re consistently chasing payments from a certain client, ask yourself: Are they worth it?

WHAT – What Is Your Collection Process?

You wouldn’t run a business without a sales strategy. So why run it without a structured cash collection process?

  • Do you have a system in place, or do you only chase invoices when cash is tight?
  • Are your terms clear and enforced?
  • Do you follow a process—reminders, escalation, legal action if needed?

A structured, proactive approach to collections ensures you’re always in control of your cash, not scrambling when payroll is due.

WHEN – When Do You Take Action?

Timing is everything. Businesses don’t fail overnight—it happens gradually, invoice by invoice, delayed payment by delayed payment.

Ask yourself:

  • Are invoices being sent the moment work is completed?
  • Do you have a set schedule for follow-ups and reminders?
  • When do you escalate overdue payments?

A day too late in chasing a payment can mean waiting another 30 days. Delay at your own risk.

WHERE – Where Can You Improve?

Every business can sharpen its cash flow management.

  • Are you using technology to automate invoices, reminders, and collections?
  • Are you keeping track of patterns—which clients always pay late?
  • Are you training your team to handle objections and close payments faster?

Small tweaks can mean big improvements. Identify the weak spots and tighten them up.

HOW – How Do You Measure Success?

If you can’t measure it, you can’t improve it.

  • What percentage of your invoices are paid on time?
  • What’s your average collection time?
  • Are your payment terms realistic for your industry?

Your Key Performance Indicators (KPIs) should be in line with your business needs. Set them, track them, and improve them.

Final Thought – Cash Flow Is a Choice

A business doesn’t fail because it lacks sales. It fails because it lacks cash.

Growth is exciting, but only if the fundamentals are in place—a solid invoicing process, clear payment terms, and a structured approach to collections.

So, take a moment to review your WHO, WHAT, WHEN, WHERE, and HOW.

  • WHO owes you money?
  • WHAT is your collection process?
  • WHEN do you take action?
  • WHERE can you improve?
  • HOW do you measure success?

Get these right, and your business will thrive. Ignore them, and you might just be another statistic.

What’s your cash flow strategy for the year ahead?