Cash Flow Hacks Every CPG Founder Should Know
You can have growing sales, a killer product, perfectly-honed ads, and a packed production calendar—and still run out of cash.
That’s the reality of cash flow for CPG brands in the early stages of growth. Payment terms, inventory cycles, freight timelines, and retail disbursement windows almost never align with when money actually hits your account. In my role as CEO of Balanced Business Group, I’ve seen founders hit a wall not because the business is broken, but because the cash flow timing is off.
The good news? You don’t need a financial overhaul to create breathing room. You need tools that buy time, spark cash flow, open up production, and keep your retail pipeline on track. Keep reading for some short-term cash flow tips you can implement this week to improve cash flow for your CPG without outside funding.
Reshape Your Payment Terms
The fastest way to unlock cash flow for CPG brands? Adjust when it leaves and enters your business. Most founders think of payment terms as fixed. They’re not.
You can push payables, pull receivables, and reshape your cash cycle—without raising a cent.
If you're buying packaging on Net 30, ask suppliers for Net 60. You don’t need to overexplain. Frame it as a scaling conversation:
“We’re expanding our distribution footprint and need more flexibility on payment terms. Can we revisit our agreement?”
Now flip it. Are you invoicing a specialty grocery chain on Net 90? That’s 90 days you’re acting as a bank. Ask for Net 60—or even Net 30 with an early-pay incentive.
Some buyers won’t budge. But many will—especially if you offer dynamic discounting. A 2% discount for paying 20 days early may cost you $100 on a $5,000 invoice, but it gets you the cash to fund your next production run.
It’s not about getting perfect terms everywhere. Your goal is reducing the spread, therefore shortening the time between paying and getting paid. That’s cash.
Want a clearer picture of where your money’s really tied up? Start with your cash conversion cycle.
Leverage Short-Term Financing Strategically
There’s a big difference between taking on debt and using working capital strategies.
Short-term financing tools exist to bridge the operational lag that CPG brands deal with every day. The trick is knowing when to use them, and when to walk away.
Invoice financing for brands is the clearest path to liquidity when you’ve already fulfilled the order. Let’s say your natural soda brand ships a $30,000 pallet to a distributor on Net 90 terms. A factoring partner might give you 85% of that amount upfront—within 48 hours. Yes, you’re paying a fee. But it’s a tool, not a trap, if it keeps production moving and shelves stocked.
Purchase order financing is different. It frontloads capital against a confirmed wholesale order. Say you land a 2,000-case order with a new regional chain, but you don’t have the cash for ingredients and production. PO financing can be utilized before the invoice exists. It’s higher risk for the lender—so you’ll pay more. When used sparingly, it’s a bridge that can lead to growth, not dilution.
Trade spend can quietly drain liquidity—even when revenue’s growing. See how trade spend impacts cash flow and what to do next.
Tool When to Use Pros Watchouts
Invoice Factoring You’ve shipped a wholesale order, but haven’t been paid yet Fast cash turnaround, no debt added Fees can stack if used long-term
PO Financing You have a large confirmed order, but can’t fund production Funds raw materials before revenue hits. Higher fees; approval tied to buyer
creditworthiness
Merchant Cash Advance You have consistent sales and need quick liquidity Very fast to access Daily repayments can strangle short-term
cash
Line of Credit You need flexible access to cash over time Only pay for what you draw; useful for Requires stronger financials and time to
covering gaps set up
Reduce Operating Expenses Without Losing Momentum
When money’s tight, cutting costs feels like the obvious play. But panic-cutting hurts more than it helps. Your job is to shed what’s not driving revenue. Here’s what to review first during a fast expense audit:
Software subscriptions: Cancel anything you haven’t used in the last 30 days.
Digital ad platforms: Pause every ad campaign under 1.5x ROAS and reallocate budget toward proven flows such as retention emails or SMS winbacks.
Freight and fulfillment: Run a per-unit analysis of your 3PL or shipping partners—look for zone inefficiencies, packaging waste, or breakage costs that add up.
Packaging SKUs: Consolidate materials across products where possible—switching from five lid types to two could unlock significant order volume pricing.
Professional services: If you’ve outgrown your bookkeeper, or they’re charging for things you now handle in-house, it’s time to renegotiate or move on.
Start with subscriptions. Some CPG brands spend over $2,000 per month across tools like Monday, Klaviyo, and NielsenIQ. If you’re not using it today to sell or ship product, pause it.
Then hit your ad spend with a scalpel. Not every campaign should run just because the ROAS looked good 6 months ago. Pause low-converting creatives. Cut platforms where tracking is inconsistent. Shift that budget into retention—email flows, SMS drops, or reorder incentives that bring existing customers back faster.
Don’t forget your vendors. If your co-packer added a 7% surcharge this year, renegotiate. If your film printer wants you to hit 50k MOQ to get better pricing, ask what a 20k tier looks like. Your suppliers are your partners. Start acting like a client they want to keep.
Move Slow-Moving Inventory Into Cash
Inventory is one of the biggest silent killers of early-stage cash flow. You paid for it, and you’re storing it, but it’s not selling. Every month it sits, it costs you.
Here are some inventory-clearing tactics that protect your brand:
Time-boxed bundles: End-of-season duo or vault drop pairings of slow SKUs with top-sellers build urgency without devaluing your brand.
Loyalty unlocks: Offer limited dead-stock SKUs exclusively to returning customers or subscribers—position it as a reward, not a clearance.
Channel segmentation: Push slow movers through discount marketplaces such as Faire or Bulletin—not your DTC site—to avoid setting new customer expectations.
Surprise-and-delight inserts: Slip slow SKUs into top-tier orders as free gifts. You’ll move product and increase brand affinity.
Founder drops: Run a 48-hour flash sale through your personal email or Instagram story—relate it to clearing space for the new line, not panic selling.
The first step? Know what’s not moving. If your April SKU hasn’t shipped in 8 weeks, stop hoping it sells on its own. Bundle it with your hero product, or position it as a bonus flavor or a throwback drop for loyal subscribers.
If you’re running Shopify, create a flash landing page and email your list. And if you truly need the cash? Look into off-price B2B platforms.
Dead inventory requires a decision. You can hold it, or turn it into the next production cycle.
Tap Into an Outsourced or Fractional Team
You don’t need a full finance department to stabilize cash. You need access to the right thinking—when it matters most.
That’s where fractional teams come in. You can get a seasoned controller to clean up your books, an operator who’s launched dozens of SKUs, a supply chain expert who’s optimized freight cost curves, or even a finance strategist to model your next line extension. But instead of adding four salaries to your burn rate, you get what you need, only when you need it.
Let’s say you’re running a kombucha brand, and you’re a few weeks out from a major stockout. You’ve got a big reorder pending, but your co-packer needs payment upfront. Instead of panic-funding, this is where someone can step in to analyze your books, model your forecast, renegotiate terms, and unlock the $40K you need.
Take Action Today, Plan for Tomorrow
There’s no badge of honor for gutting it out alone. Founders who survive cash crunches use smart liquidity tactics for start-ups that free up capital and create options.
If you want help applying these strategies to your brand, we’re here. We’ve helped dozens of founders stabilize fast, and we’d be glad to do the same for you.
Contact Balanced Business Group to get started.
