Whether riding out a slow sales season, purchasing new equipment, or paying a supplier, a small business’ competitive advantage hinges on deft cash flow management and ready access to capital.

Unfortunately, financing doesn’t always work that way. “Expenses and opportunities are real-time events and access to capital has an inherent delay in it, so when these things don’t line up, there can be strained relationships or missed opportunities,” says Jeff Mitelman, CEO of Thinking Capital, a Canadian fintech company with offices in Montreal and Toronto.

How to better manage cash flow

Managing cash flow means small business owners can improve access to capital and maintain a competitive advantage. Here are some tips to ensure you’re prepared no matter your business’ bank balance.

1. Anticipate the unanticipated

Every business needs a certain amount of contingency planning. “Having two to three months of advanced cash flow that isn’t encumbered elsewhere allows the business to react quickly when unforeseen expenses or opportunities show up,” says Mitelman.

2. Know your sales cycle

Reflecting on how long it takes to turn your inventory will enable you to better align your payables with your cash flow.

3. Learn your Small Business Grade

Equifax and Thinking Capital have partnered to create BillMarket, a free tool that provides a new way for small businesses to understand their credit and access financing. Available in Canada for the first time, the Small Business Grade is a dual score showing the business owner’s creditworthiness and credit eligibility amount. “By understanding their credit profiles better, small business owners can have easier access to much needed business loans, even if personal credit is a challenge,” says Mitelman.

4. Consider non-traditional borrowing

In addition to the Small Business Grade, BillMarket provides a unique financing option that allows business owners to extend terms with their key suppliers by up to 120 days. Through a simple online application process, business owners can get approved, receive funds, and pay their vendor on the same day.