How to avoid cash flow interruptions: a practical guide for entrepreneurs

In the previous article, we took a detailed look at why cash flow interruptions occur and why they affect even experienced entrepreneurs, SIA owners and self-employed professionals in Latvia.

Now let’s move on to the practical part - how to prevent interruptions, which steps truly work, and how to build a cash flow system that keeps your business stable.

How to avoid cash flow interruptions

A cash flow interruption is not inevitable, and it is not the end of the business. It is a signal that your cash flow needs attention. Below are reliable, proven methods that help self-employed individuals and entrepreneurs maintain stability.

1. Cash flow planning

Self-employed individuals and SIA owners often know how much they will earn, but not always - when exactly the money will arrive. This is crucial.

Planning helps you see:

• income dates
• mandatory payment dates
• days with potential deficits

This allows you to prepare in advance, postpone expenses or agree on payment adjustments.

2. Prepayments and advance payments

Even a small advance reduces the risk of cash flow interruption.

Prepayment helps cover:

• materials
• marketing expenses
• subcontractor work
• project start-up costs

This is especially important for self-employed individuals and services with a long delivery cycle.

3. Shorter payment terms

If the standard is 30 days, try 7-14 days.

Make it as easy as possible for your client to pay by offering several payment options:

• card payment
• Apple Pay and Google Pay
• bank link payment
• QR code

The fewer steps required - the faster the money arrives.

4. Splitting large payments

• rent split into parts
• purchases split into batches
• marketing budget split weekly
• taxes planned in advance

This helps self-employed individuals and SIA avoid situations where 4-5 payments “hit” at the same time.

5. Convenient payment methods for clients

If a client can pay the invoice in 10 seconds - they will pay faster.

Modern payment methods speed up cash flow:

• bank card
• internet banking
• built-in online payments
• mobile payments

This directly reduces the risk of a cash flow interruption.

6. Accounting automation

Most interruptions occur because accounting is done manually or irregularly.

A system helps your business when it:

• synchronizes bank transactions
• reads receipts
• shows the actual balance
• analyzes expenses
• reminds you of taxes and deadlines

This gives you real understanding of your situation - not guesses.

7. Financial reserve

A reserve equal to one month of expenses is already a safety cushion. Three months - the ideal scenario for self-employed individuals and small SIA.

This reserve helps you calmly get through:

• late payments
• unexpected expenses
• equipment breakdown
• seasonal downturn

8. What to do if an interruption has already happened

In a critical moment, it may seem that a loan is the fastest solution. But it often creates new and even more complex problems.

A loan fixes the consequences, not the cause

If you don’t change:

• payment terms
• invoice issuance timing
• expense planning
• cooperation model with clients

Then in a month the interruption will repeat.

The debt spiral begins

• monthly obligations
• interest
• fees
• late penalties

Credit rating decreases

• loans become more expensive
• limits decrease
• services may be denied
• landlords become cautious

Stress leads to impulsive decisions

• high-interest loans
• borrowing from private individuals
• covering one payment by delaying another
• postponed obligations

Therefore, the main thing is not to borrow, but to find and fix the cause.

The best approach - fix the process, not the symptom

• negotiations with suppliers
• expense restructuring
• shorter payment terms
• transparency with clients
• using automation
• switching to a modern accounting system

Conclusion

A cash flow interruption is not a mistake and not a sign of business weakness. It is a sign that your cash flow needs attention. It can be predicted and controlled if you understand cash flow and deadlines.

And it is especially important that self-employed individuals and SIA owners in Latvia see their finances in real time.

How to avoid cash flow interruptions with pats.lv

Modern accounting by pats.lv helps entrepreneurs and self-employed individuals avoid cash flow interruptions thanks to:

• real-time visibility of income and expenses
• automatic tax calculations
• bank transaction synchronization
• instant receipt and invoice scanning
• expense analytics
• deadline reminders
• modern online invoicing
• payment via link or QR code
• payment status tracking

Pats.lv speeds up cash flow, reduces errors, and helps entrepreneurs make decisions based on facts, not assumptions.

It is not just accounting - it is a tool that significantly reduces cash flow interruption risks. The system is designed so accounting can be done independently or together with an accountant. Register, try all features - feel the difference and choose the plan that suits you best.