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4 Easy Changes To Adopt (At No Cost) To Improve Your Business Cash Flow

In the digital world that we live in, you shouldn’t be making payments to your suppliers via cheques anymore.

This article was written in collaboration with OCBC Business Banking. All views expressed in this article are the independent opinion of based on our research. is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.

2020 has been a year of many firsts for businesses in Singapore. To slow the COVID-19 outbreak in Singapore, companies were encouraged to allow their employees to work from home. We even had a 2-month long Circuit Breaker where only essential workers were allowed to go into the office.

For better or worse, many of our companies had to adopt different ways of doing work to continue our operations. This includes introducing split team work arrangements, allowing remote working and utilising technologies such as Zoom and Hangouts for virtual meetings.

Another area that we shouldn’t neglect as business owners is cash flow management. While it’s natural to spend time focusing on generating profits for our business, cash flow is the lifeblood of any business. Without it, even profitable companies may fold.

Thankfully, there have been government grants such as the Job Support Scheme (JSS) and the Jobs Growth Incentive (JGI) to help Singapore businesses with their cash flow. At the same time, there are also other operational changes that we can consider implementing to improve our business cash flow.

#1 Adopt E-Invoicing

Inexplicably, many businesses still rely on snail mail to send invoices, receive cheque payments or make salary payments via cheques.

This isn’t ideal. When Circuit Breaker occurred earlier this year, some business owners found themselves having problems with their financial operations when their staff could not work in the office. Some companies we spoke to even had finance staff stuck in their home countries (e.g. Malaysia) because of travel restrictions. This created significant inconvenience to the companies because they had problems paying or receiving funds during this period.

It’s an unfortunate but entirely avoidable problem.

By adopting an e-invoicing solution, companies can ensure that their financial operations continue smoothly even if their staff has to work remotely. It allows companies to be agile as they have full control and oversight on their financial operations even when they are not in the office.

One such system that we can consider for our businesses is InvoiceNow – a nationwide e-invoicing method that facilities the direct transmission of invoices in a structured digital format across finance systems. Operating on the open standard Peppol network, this new standard of invoicing can help Small and Medium Enterprises (SMEs) and Large Enterprises (LEs) enjoy smoother invoicing and faster payments. The adoption of InvoiceNow is also being encouraged by IMDA.

If, like us, you are an existing OCBC Business Banking customer, you will be glad to know that e-invoicing (via the InvoiceNow system) is integrated as part of OCBC Digital Business Banking. This means that all OCBC Business Banking customers can use the e-invoicing system (for free) with no subscription or cap on the number of invoices they can send.

From now till 31 December 2020, businesses also receive a one-time grant of $200 when we register our company’s UEN on the E-Invoicing Network. As an existing OCBC Digital Banking customer, you can do this easily via your OCBC Velocity login.

Read Also: E-Invoice VS Paper Invoice: What Are The Differences Singapore Companies Should Know About

#2 Start Tracking Your Business Expenses Carefully

Besides using an e-invoicing system to send and track invoices, we should keep a tight control over our business expenses.

One way to do that is to have an expense management system. For example, we can track monthly expenses such as payments to suppliers, office rental and utility bills and employees’ claims and benefits.

This can be done quickly and entirely online. For example, all OCBC Business banking customers can now use its suite of Business Financial Management features that are integrated to their OCBC Velocity platform to upload business bills that they need to pay for. This allows us to keep track of which bills have been paid and set reminders to alert us on when unpaid bills are due to avoid any unnecessary late charges or if they are significant enough, cash flow constraints.

#3 Do Financial Forecasting Regularly

Given that we are currently in an economic recession, cash flow management is more critical than ever. As a business, we should be diligent in invoice and expenses management and use this information for financial forecasting.

As an OCBC Business banking customer, we now have access to Business Financial Management features that chart a summary of our monthly cash inflow and outflow. This allows us to have – at a glance – an overview of how our business has performed over the past year. Using the same information, we can even do financial forecasting for the future.

If we have multiple business bank accounts, we can also pool information from our accounts together.

Doing this is vital as it prevents our businesses from being caught in a negative cash flow position that may lead to further problems, such as not being able to pay salaries and rent on time.

#4 Consider Applying For A Business Loan (Even If We Don’t Need It Yet)

If we are able to do financial forecasting through OCBC Business Financial Management, we can use it to identify potential cash flow problems in the future before they happen. This allows us to plan for contingencies early, rather than to scramble for cash when the time comes.

If we are undertaking a project that requires us to expand our team quickly but for which payment would only be made by our clients at the end of the project or in phases, we may find ourselves in a tight cash flow situation during the interim period. To resolve this, we can consider applying for a business loan first, even if we don’t think we need the cash immediately.

For companies that intend to expand, taking a business loan first might make sense so that we have the cash flow to scale up quickly in the future when the opportunity presents itself.

This is especially since interest rates for Singapore businesses will be kept relatively low in 2020 and 2021 because of the Temporary Bridging Loan, a government-assisted loan that helps Singapore companies get access to working capital loans at low cost to ease their short-term and mid-term cash flow challenges.

Under this scheme, companies can borrow up to S$5 million, with a loan repayment period of up to 5 years. Interest rates are capped at a maximum of 5% p.a. and depending on our company’s credit history and financial performance, we might be able to enjoy an interest rate of 3% p.a. or lower. By applying for a loan, we can also start building our business’s credit history while it’s in a strong financial position.

Read Also: Temporary Bridging Loan Programme: How It Works And What Are The Criteria For Businesses To Apply For It?

While it’s true that 2020 hasn’t been easy for businesses, it doesn’t mean that our business growth needs to be stagnant as we wait patiently for the pandemic to be over. By implementing some of these changes to our financial operations today, we can set our business up for future success and capitalise on opportunities that come our way.