Knowledge Center
Managing Capital and Cash Flow – Liquidity, Solvency, Cash Management and Payments
running-a-business | Read Time: 3 minutes
By Jeremy Shackleford | Published: June 2023

Cash flow. It’s the top priority for most small businesses, and for good reason, because cash flow problems are the top reason small businesses fail, according to SCORE.org.
Having solid cash flow and access to capital directly impacts small businesses in practically every way, from managing assets and operations to financing and managing supply chains.
Key areas small businesses can initially zero in on to set up and manage their cash flow and capital are liquidity and solvency, and cash management and payments.
Liquidity & Solvency
While liquidity looks at the short-term capability of your small business to pay its liabilities, solvency looks at the long term. Both are key to your business’ success at any stage, and there are options available to address both in tandem.
For example, if you are having difficulty turning assets into cash quick enough to keep your business in a liquid position, your long-term solvency could be affected. This is where access to capital is paramount. By having access to the funds you need, whether through a U.S. Small Business Administration (SBA) loan, a traditional small business loan or line of credit, or strategically leveraging cash rewards on select credit cards, an infusion of cash for operating expenses can help level out the money-in versus money-out challenges if your cash flow cycle is a bit longer by nature or is impacted by outside factors.
Assemble a team consisting of your banker, accountant and other advisors to identify your business’ needs, set up cash flow forecasting, and the best approach to manage liquidity. Through these efforts, your long-term solvency can see an uptick too.
Cash Management & Payments
Half the battle with cash flow and keeping capital levels in a healthy place is efficient accounts receivable and accounts payable methods. There are simple steps you can take for each that can help the day-to-day management of cash flow easier.
- Accounts Payable: Pay electronically using your bank’s bill payment service and connected accounting software. Also set up ACH and wire transfer services to pay vendors electronically, and consider using small business credit cards for some vendors, building credit for the business and even generating incoming cash flow through rewards.
Be sure to spread out your payments, prioritizing as needed to ensure your supply chain and service needs are met while maintaining healthy liquidity levels. - Accounts Receivable: There are several ways you can leverage your bank’s merchant services, business banking and technology advances to increase cash flow and capital levels. Make sure you accept convenient payment options for your customers, and if you don’t know for sure, ask them! Your regular customers or clients may have great feedback on what makes it easier for them to do business with you.
If your small business uses point of sale (POS) for payments, accept several forms of payment, including cash. If your business is cash heavy, smart safe technology may be a consideration to deposit large sums of cash safely and efficiently into your business banking account.
If your business uses invoicing, invoice right away when possible, aiding in getting paid for when your products or services are sold rather than closer to when you need to replace inventory or other supply chain needs that are critical to your business operations.
Even the healthiest businesses should look at their short- and long-term capitalization at least mid-year and again when planning for the following fiscal year. And if you are unsure of a long-term direction or are experiencing short-term liquidity, cash flow or capital challenges, sit down with your team as soon as possible to map out a revised plan for your small business.
About the Author – Jeremy Shackleford
Jeremy Shackleford is Senior Vice President, Director of Small Business Sales for WSFS Bank. He joined WSFS in 2018 after nearly 20 years working in banking and financial services, and was most recently Senior Vice President, Regional Manager for WSFS’ Greater Philadelphia Market, where he oversaw 15 Retail Office locations. He also served 10 years as a member of the United States Air Force (AFSOC).
Related Articles

WSFS Bank Salutes Small Business Customers on FOX 29!
To celebrate Small Business Month, WSFS Bank teamed up with Bob Kelly and FOX 29 to spotlight small business Customers that are making strides to grow their businesses as economic engines in their communities!
Read More
Eddington House Serves up Local Favorites on FOX 29!
As an entrepreneur who already owned two bars, Patrick McConney knew that when Eddington House, or The 19th Hole as local golfers know it, became available to buy it was a prime opportunity to expand his business.
Read More
Action Potential Shows Why One on One Physical Therapy is the Way to Go on FOX 29!
Founded in October 2011 by two devoted physical therapists, Kathy Dixon and Kristen Wilson, Action Potential One on One Physical Therapy provides innovative, highly customized treatment based on their years of experience and patient interactions.
Read More
Addison Bay Appears on FOX 29’s Kelly Drives in Style!
When Marguerite “Marghi” Adzick founded Addison Bay in 2018, she aimed to fill a gap in fashion for on-the-go, professional women. Having forged a successful career in the fashion industry, she combined her passion for fitness with her experience in the industry and as a college athlete to create quality, stylish and functional activewear.
Read More
Baker Street Bread Cooks Up a Delicious Breakfast on FOX 29’s Kelly Drives!
Founded by Tom Ivory in 1992, Baker Street Bread Co. has grown tremendously over the years. From its roots as Philadelphia’s first artisan bread bakery and wholesale distributer, Tom and his son Tim have expanded Baker Street Bread with two locations, the wholesale bakery in south Philadelphia and an artisan bakery and café in the quaint and historic neighborhood of Chestnut Hill, Pa.
Read More