Improving cash flow from within your own business: 8 measures
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
Your cash flow improves fastest by invoicing straight after delivery, asking for a deposit, agreeing a short payment term and having regular clients pay by direct debit. Without an agreement, a 30-day payment term applies between businesses, with a maximum of 60 days.
- For consumers, a deposit for products may be at most 50 per cent.
- Large companies must pay SMEs and freelancers within 30 days.
- When a business client pays late, collection costs are at least € 40.
- Set the VAT aside in a separate account with every receipt.
Many entrepreneurs with a healthy business still regularly have tight months. The cause is usually not too little turnover, but timing: you pay your costs and VAT before your clients pay you. The good news is that you can do a lot about it yourself, without bringing in outside parties. This article sets out eight measures with a direct effect on your cash flow, from invoicing on the day of delivery to a fixed rule for your VAT. A worked example shows how much money is released when clients pay faster.
Why profit is not the same as money
Your profit shows what you earn; your cash flow shows when money comes in and goes out. An invoice of € 5,000 counts towards your turnover straight away, but if your client only pays after 45 days, you do not have that money all that time. Meanwhile you still have to pay your rent, your purchases and the VAT on that invoice. That is why the difference between turnover, profit and income matters so much. A cash flow forecast shows in which months things get tight.
Eight measures that work immediately
Start with the measures that take the least effort. The first three often deliver the most.
- Invoice on the day of delivery, not at the end of the month. For longer assignments, invoice weekly or per milestone.
- Ask for a deposit at the start of an assignment. For consumers, this may be at most 50 per cent for products; for services there is no legal maximum. See booking advances and deposits.
- Agree a short payment term, such as 14 days, in your quote and terms and conditions.
- Have regular clients pay by direct debit, so the money comes in on a fixed day.
- Send a reminder the day after the due date and call after a week; see credit control.
- Keep less stock and order more often in smaller quantities.
- Pay your own suppliers on the due date, not earlier, and choose monthly payment for subscriptions instead of an annual amount in advance.
- Set aside the VAT from every payment received straight into a separate account.
Worked example: getting paid faster
You calculate how much money is tied up with your clients by multiplying your turnover per day by the average number of days clients take to pay.
Turnover € 15,000 per month, clients pay faster
- Turnover per day
- € 15,000 / 30 = € 500
- Outstanding at 45 days payment time
- € 22,500
- Outstanding at 20 days payment time
- € 10,000
Result: By getting clients to pay 25 days faster, an extra € 12,500 lands in your account once, without a single euro more turnover.
Payment terms: what the law says
If you have agreed nothing with a business client, a payment term of 30 days applies. You may agree a maximum of 60 days, and large companies must pay SMEs and freelancers within 30 days. If a client pays late, you are entitled to collection costs, with a minimum of € 40 for business clients. Read more about the statutory payment term and collection costs.
Tax: no surprises
An unexpected tax assessment is a common cause of a tight month. So besides VAT, also reserve a fixed percentage of your profit for income tax; see how much to set aside for tax. Align your provisional assessment with your expected profit, so you pay in monthly instalments rather than all at once afterwards.
Frequently asked questions
May I ask for a deposit?
Yes. For consumers at most 50 per cent for products; for services and business clients you agree it yourself.
What payment term applies if I agreed nothing?
Between businesses, 30 days. You may agree a maximum of 60 days, and large companies must pay SMEs within 30 days.
What is the quickest win for my cash flow?
Usually invoicing straight after delivery and agreeing a short payment term. It takes little effort and often gives the biggest improvement.
Sources
- Get your client to pay on timeKVK · kvk.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
