If you run a small or medium sized business in Singapore today you probably know how stressful cash flow can be. Even though it is easier to get financing now that interest rates have come down, many SMEs are still feeling the squeeze. Rising costs and slower payments are eating into working capital which makes it harder to pay staff, lease space or plan for growth.

In 2026 it is still clear that managing cash flow is one of the biggest concerns for local SMEs. Many businesses are running low on cash reserves and do not have much runway before they run into trouble. Surveys show that a large number of firms only have a few months worth of cash set aside and this makes planning ahead a real challenge.

Let us look at the most common things that are creating cash flow pain for SMEs today and then explore how you can turn these situations around.

Common cash flow pain points for SMEs

Costs are rising faster than cash is coming in. Manpower is a major pressure point for 63% of SMEs, while 40% struggle with rental expenses, alongside ongoing logistics and supply chain costs that continue to drain working capital.

At the same time, businesses are waiting longer to get paid. Economic uncertainty and tighter liquidity have stretched payment timelines, meaning invoices take longer to turn into usable cash.

Profitability is also tightening. Only 4% of businesses reported higher profits in the past year, while 34% saw profits decline, leaving many SMEs with thinner reserves and less financial breathing room.

Inventory adds another layer of strain. Higher holding costs and unpredictable supply chains mean more cash is locked in stock instead of being available to support daily operations or growth.

What can SMEs do to improve cash flow?

Start by being proactive about invoicing. Send invoices as soon as you deliver services or products and make your payment terms very clear. Following up on unpaid invoices promptly and consistently reduces the amount of time money sits in accounts receivable. Some businesses also offer small incentives for early payments which can encourage customers to pay faster.

You might also consider alternative financing options that give you access to cash when you need it without waiting for customers to pay. Invoice financing lets you unlock the value of unpaid invoices immediately. This means you get the cash sooner and are not stuck waiting 30 or 60 days for payments to arrive.

Using digital tools to manage your finances can make a huge difference too. Cloud accounting platforms and software that automatically tracks invoices payments and reminders give you real time insights into where your cash is and where it is going. This makes it easier to make decisions based on actual data rather than guesses.

Forecasting cash flow should also become a regular business habit. Look ahead at your expected receivables and payables and plan for slower periods so you are not caught off guard. Predicting shortfalls before they happen gives you time to find solutions rather than reacting at the last minute.

Where technology can help

If all of this sounds like a lot to handle you are not alone. Many SME owners find it overwhelming to balance day to day operations with financial planning. This is exactly why technology tools are becoming so important.

For example Xero is a cloud accounting platform that brings your invoices, bank transactions and financial reports into one place. With Xero you gain a clear picture of cash inflows and outflows, monitor customer payments and generate forecasts with ease. Many businesses in Singapore use Xero to stay on top of their finances and reduce manual work.

Another solution is Claryx.ai which uses artificial intelligence to automate routine financial tasks, speed up collections and provide smarter cash flow predictions. Tools like Claryx.AI take the stress out of follow up and help you focus on growing your business instead of constantly chasing payments.

See these solutions in person

If you want to experience these platforms in action, both Claryx.ai and Xero will be exhibiting at Business Show Asia this year. This is a great opportunity to see how their solutions can help you manage cash flow better, improve financial visibility and build long term resilience for your business.

Visit their booths at the show and talk to the teams so you can find practical tools that match your needs and help you overcome your toughest cash flow challenges.

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