How to Improve Cash Flow and Grow Your Service Business

1. Track and forecast cash flow

Consistently tracking your cash flow helps you identify trends, predict costs, and plan for big expenses. Over time, you can use it to predict cash flow each week, month, or year to see whether you’re on track to be cash flow positive or if you need to make adjustments to spending.  

A simple way to start tracking cash flow is to add up your income and expenses each week. Then, use those numbers to create a cash flow statement you can use to review monthly cash flow. 

From there, use your predicted expenses and scheduled jobs to calculate a cash flow budget to predict next month’s cash flow as well. This will help you identify what your cash flow looks like long-term, so you can make adjustments to your expenses and pricing before cash flow issues become a problem.

2. Improve your invoicing process

Getting paid on time and in full directly impacts cash flow. And the more effective your invoicing strategy, the more likely customers are to pay their bills quickly. 

To make the most of your invoices, be sure to: 

3. Make it easy for customers to pay you

The easier it is for customers to pay you, the faster they’ll do it. By offering multiple payment methods, you give clients a way to pay you that doesn’t require withdrawing cash or visiting your office. 

To make it easy for customers to pay you anytime from anywhere, consider accepting: 

• Online debit and credit card payments
• ACH payments
• E-transfers
• Automatic payments for recurring services

With Jobber Payments, you can accept a variety of online and in-person payment methods, customizing your payment collection strategy to match your clients and services.

READ MORE: How to accept credit card payments on your phone

4. Reduce your expenses

Sometimes, cash flow issues are less about your revenue and more about costs. 46% of small business owners say inflation is their biggest challenge, and 75% have been significantly impacted by rising prices. 

Reducing costs frees up working capital and reduces cash outflow. When possible, boost cash flow by: 

• Downsizing your office space or hiring remote administrative workers
• Reviewing your bills to see if you can cut an unnecessary expense from your phone, internet, or software bills by changing your contract
• Taking a look at your inventory and equipment to evaluate what you use and what you don’t, then sell anything that’s gathering dust
• Leasing equipment instead of buying, especially if it’s something you only need for a single contract
• Talking to your suppliers about discounts for bulk orders or early payment discounts
• Hiring subcontractors for seasonal work or one-off jobs instead of employees
• Negotiating new contracts with vendors and suppliers

5. Boost your revenue 

If you’ve already decreased costs but still have poor cash flow, think about how you can increase revenue instead. 

Some effective strategies include:

6. Offer customer financing to win more jobs

Sometimes, clients need work done even if they know they’ll struggle to pay for it, like emergency plumbing repairs or mold removal. 

When this happens, it puts both of you in an awkward situation. 

That’s where financing can come in handy. If you offer financing to customers, you get paid upfront from a lender while the client makes monthly payments over time. 

This prevents your cash flow from being impacted and keeps you from having to deal with unpaid invoices.

With Jobber’s Wisetack integration, you can get paid upfront without having to worry about loan terms or payment collection.

7. Ask for deposits

Not all clients have good intentions. If you’re paying for job materials or supplies upfront, you’re putting yourself at risk if the client doesn’t make good on their invoice. 

And, unfortunately, it’s impossible to tell whether a client’s going to skip paying you until it’s too late.

Asking for a deposit ensures you get the immediate cash you need to cover costs and gets the client financially invested in the job from day one.

8. Promote recurring services

The more recurring clients you have, the more consistent and reliable your cash flow will be—and the more profit you’ll make. In fact, recurring customers spend an average of 31% more than first-time clients. 

And since getting a new customer costs between five to seven times more than keeping an existing one, retaining existing clients is a great way to improve cash flow. 

Recurring services can be things like house cleaning, lawn care, snow removal, or seasonal HVAC maintenance packages. Whichever you offer, make sure your clients know about it. 

Then get as many on board with ongoing work as you can by making sure to promote it through your marketing efforts.

Use a tool like Jobber Campaigns to let clients know when they should book you for annual maintenance or switch from your mowing to shoveling service.

9. Plan for seasonal fluctuations

If you have a seasonal business, like landscaping, pressure washing, or roofing, prepare for the off-season by: 

• Offering seasonal services like holiday light installation or snow removal
• Reducing your costs, like staffing and rent
• Setting aside money in your busy season to cover costs during slower months

Encourage early bookings and ask clients to pre-pay for seasonal packages to keep a steady cash flow by promoting seasonal services early and often.

10. Build a cash reserve

A cash reserve gives you money to rely on to cover unexpected expenses and fluctuating cash flows without going into debt. 

To build a cash reserve: 

• Start small. As long as your company is making a profit, you can contribute to a cash reserve each month. While the amount you contribute will vary based on your business’s revenue, 10% is a good starting point. 
• Set a goal. Aim to set aside enough to cover 3-6 months of expenses, including payroll, bills, and labor. 
• Keep it separate. Put your cash reserve in a separate account so it’s easy to track and access, but without getting lost in your everyday transactions. 
• Pay back what you spend. If you use money from your cash reserve, adjust your budgeting to pay it back as quickly as possible. Depleting your reserve will only make it harder to build back up. 

This will ensure emergencies don’t eat up cash flow, leaving you scrambling to cover regular monthly costs.

11. Prioritize reliable clients

When someone reaches out to ask for a quote or book a job, take a look at their client history. 

Do they typically pay on time and in full? If they have a habit of paying late or only making partial payments, it might be time to fire them. 

Your cash flow relies on building a list of trustworthy and high-quality clients. Focus on doing business with the ones you can rely on to pay you over the ones who don’t.

12. Use software for better cash flow management

Managing cash flow is essential for improving cash flow. It’s what ensures you’re prepared for unexpected costs, slow seasons, and emergencies without going into debt. 

But tracking, managing, and boosting cash flow is a lot of work. Software like Jobber can make it easier by: 

• Automatically monitoring overdue invoices and sending payment reminders
• Processing online payments to make getting paid easier
• Forecasting cash flow to predict cash inflow and outflow so you can plan ahead
• Spotting opportunities and risks through reports based on real business data

This allows you to make strategic cash flow decisions that support healthy business finances and help you grow.