• David Parker

Managing small business cash flow in 2022

Ideas and tips to manage your cashflow and income in 2022.

It’s been a lean time for small businesses, and especially the families supporting them.

Xero’s small business trends report shows that 60% of small business owners are worried about their household finances running low. So while 2022 will hopefully be a year of rebounding sales and revenue, owners really need that to carry through to the business’ bottom line.


Businesses must analyse margins and focus on the products and services that generate actual profits as they try to restore cash to the business.


While there will be a temptation to withdraw any spare cash from the business as ‘owner’s drawings’, experts say it’s important to be mindful of upcoming and potentially unknown expenses.

Owners often overlook upcoming business expenses when taking drawings, which creates cash flow issues later.


These cash flow issues create further disruption to the household budget because money has to be put back to the business. Rather than clearing out the business bank account, owners are better off paying themselves a modest amount at regular intervals.

Takeaways for small businesses

There are a few things small businesses can do to help support their recovery according to Xero’s small business trends report:

  • Analyse your business margins and focus on products that generate the most profit

  • Create a ‘rainy day fund’ within the business so you’re not constantly loaning it money from your personal savings

  • Schedule regular, sustainable drawings to ease home budgeting

  • Keep your regular drawings modest, as you can always give yourself a bonus payment at the end of a good year

Check out other trends for 2022

Read Xero’s small business trends report to learn more about how to manage your cash and income to set your business up for success in 2022.

If you need help with cashflow, contact Purple Accounts today. Call 01925 979500 or email enquiries@purpleaccounts.com