Proven ways to strengthen your liquidity in 2026!

For many businesses, improving liquidity is a top priority. A lack of liquidity can quickly lead to financing gaps, unpaid invoices and, in the worst case, insolvency - even if the business itself is profitable. In this article, we explain how you can strengthen your liquidity both in the short and long term, and what you can do to improve it quickly when things get tight.

Key takeaways: How to improve liquidity

Improving liquidity means ensuring that your business always has enough cash available to pay its bills and remain flexible when opportunities arise.

In the short term, anything that brings money into your account faster or delays outgoing payments can help:

• Issue invoices with shorter payment terms or agree on advance payments
• Actively follow up on outstanding invoices and remind customers of overdue payments
• Arrange payment plans with suppliers or ask for temporary payment deferrals
  

In the long term, the goal is to make cash flows more predictable, keep costs under control, and reduce dependencies:

• Review income and expenses at a fixed point at least once a month to plan ahead
• Identify and address the causes of liquidity issues, for example by adjusting payment terms or planning large quarterly payments in advance
• Monitor fixed costs closely and reduce them where possible

What liquidity means for businesses

Definition: Liquidity and payment ability

Liquidity describes whether your business can pay its bills when they are due. It is not about whether your company is performing well or generating profits, but about whether the money is available at the right time. What we often see in practice is that businesses generate solid revenue and issue invoices regularly, yet still come under pressure because customers pay late. At the same time, rent, salaries, and supplier costs continue to be due immediately.

Example: Insufficient liquidity in practice

A company issues invoices totaling €50,000, but these invoices are only paid several weeks later. In the same month, however, expenses of €40,000 are due. On paper, the numbers add up - but in reality, there is not enough money available in the short term. The company’s liquidity is insufficient, and important bills may remain unpaid. Liquidity therefore describes how reliably a business can meet its financial obligations when they are due.
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Rule of thumb: When more money comes in than goes out, liquidity improves. When more money goes out than comes in, liquidity declines. The situation also eases when cash comes in earlier or payments can be made later.

Short-term measures to improve liquidity

In hindsight, things always seem clearer, and long-term approaches to securing liquidity are more sustainable - but sometimes action is needed quickly. Here are five measures that can rapidly improve your company’s liquidity in the short term:

1. Invoice in a way that brings cash in sooner

Issue invoices immediately after the service has been delivered and set short payment terms. Where possible, work with advance payments or partial invoices. Especially for larger projects, this helps avoid waiting for the full amount until the very end. For example, agreeing on an upfront payment at the start and invoicing the remaining balance after delivery ensures that liquidity is generated earlier, not only once the project is completed.

2. Actively follow up on outstanding invoices

Don’t wait for customers to pay on their own. Regularly review which invoices are still outstanding and follow up early. In practice, many invoices remain unpaid simply because they get lost in day-to-day operations. A short, friendly reminder shortly after the due date is often enough to trigger payment.

Fact – EOS Study (2025):
‍In Germany, every fifth invoice is paid late, and every twentieth invoice is not paid at all. This makes regular reviews of outstanding invoices well worth it.

3. Delay outgoing payments strategically

Not every invoice needs to be paid immediately. Speak openly with suppliers or service providers about later payment dates or a payment plan. Especially in established business relationships, it is often possible to split larger amounts or postpone the payment date. This can ease short-term pressure on your cash balance

4. Review and reduce fixed costs immediately

Review your ongoing expenses and quickly eliminate anything you don’t urgently need. For example, unused software subscriptions, expensive plans, or services without a clear benefit can weigh on liquidity month after month. Even small cost reductions can have an immediate impact.

5. Bridge temporary cash gaps

When it is clear that money is coming in, but only at a later point, short-term financing can help bridge the gap. It ensures that ongoing expenses such as salaries or rent remain covered while incoming payments are still pending. What matters is flexibility — the financing should help in the short term without creating long-term commitments.
‍Digital providers like Banxware enable fast, transparent financing within 24 hours, helping businesses navigate phases of low liquidity and regain room to grow.

This was the case for the yoga studio and café Mindful Life Berlin: after a strategic repositioning, a Banxware Sofortfinanzierung helped the business get back on track.
You can watch the full story here:

Long-term strategies to improve liquidity for businesses:

Receive payments earlier to strengthen liquidity

Many liquidity issues arise because work is done immediately, while the money only comes in much later. In the long term, it helps to adjust payment models so that payments are received closer to the time the service is delivered, rather than long afterward. In practical terms, this means agreeing on shorter payment terms, requesting advance payments for larger projects, or using interim invoices instead of billing everything at the very end.

Balancing flexibility and stability

Flexible contracts can make sense to ease liquidity during weaker periods — for example with software, tools, or external services whose usage fluctuates. A tool that can be cancelled monthly may be more expensive, but it allows costs to be reduced quickly when order volumes decline. If a piece of software is used continuously and is significantly cheaper under a long-term contract, stability may be the better choice.

Set aside a realistic liquidity buffer

Unexpected expenses, late payments, or weaker months can’t always be avoided. A financial buffer helps ensure that these situations don’t become critical right away. Even small reserves can buy time and allow you to make calmer, more considered decisions instead of reacting under pressure.

Recurring revenue stabilizes liquidity

Large one-off payments often lead to significant fluctuations in your account balance. That’s why it’s worth reviewing which services can be billed on a recurring basis. Monthly billing, service or support packages, and fixed payment intervals help spread income more evenly. This makes cash flow more predictable and reduces dependency on individual payments.

Keeping a regular overview of liquidity

Long-term planning is essential to avoid liquidity bottlenecks. Taking time once a week or once a month to review your finances helps prevent being caught off guard by large upcoming bills. This gives you enough time to adjust if needed. Liquidity forecasting tools such as Tidely can also support this process.

Plan financing as an option early on

Many businesses only think about financing once things are already tight. If, as part of regular liquidity planning, financing appears to be a sensible option, it’s wise to consider it early. This allows financing to be used as a strategic tool for growth or bridging gaps, rather than as a last resort.

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Facing liquidity problems? Possible solutions

Is your business already facing a liquidity bottleneck? Don’t panic. Even though a liquidity crunch can be stressful and uncomfortable, it can be resolved in most cases. You’ll find a concrete solution to liquidity issues along with practical tips in this article: Bridging Cash Flow Gaps: Quick Ways to Regain Liquidity.

Conclusion

Improving liquidity is not a theoretical finance topic — it’s a very practical one. When there are plenty of orders, a lot of work is being done, and yet there’s still not enough money in the bank, the issue is rarely a lack of success. More often, it comes down to timing, structures, and a lack of visibility.
In the short term, clear actions can help: getting money in faster, actively resolving outstanding invoices, selectively delaying expenses, and reviewing fixed costs. Applying for flexible financing from providers like Banxware can also create breathing room when things are tight, making it possible to seize opportunities and support future growth.
In the long term, liquidity becomes stable when cash flows are more predictable, costs are managed consciously, and you maintain a regular overview of your finances. Liquidity problems rarely appear overnight. They usually develop gradually as day-to-day operations continue. Those who recognize early where money is coming in too slowly or flowing out too quickly can react in time and regain control.
And if the situation is already acute, the key is to stay calm, act in a structured way, and use the right solutions. In most cases, liquidity can be restored — with clarity, clear priorities, and the right measures.

Sources and studies:

EOS study on payment behavior among German businesses, 2025.