With Christmas around the corner and the new year fast approaching, it is a good time to start thinking about what you want to do differently in your business in 2008.

SmallBusiness.co.uk and Tracy Ewen, managing director of commercial finance company IGF, have these New Year’s cash flow resolutions that every small business owner should adopt if they want to be more profitable next year.

• Aim to prepare cash flow projections for next year, next quarter and, if you're on shaky ground, next week. An accurate cash flow projection can alert you to trouble well before it strikes.

• Balancing credit terms and cash flow needs is something many businesses struggle with. Be sure to tell your potential customers upfront about your credit terms – before you provide your product or service.

• Companies that send out incorrect invoices often find that their customers end up returning an invoice and requesting a new one. This can cause severe delays in payment and lead to cash shortfalls. Make sure that you check and double check all correspondence before it is sent out.

• Even if you get invoices right the first time, late payment can still blight a small business. To minimise this, set out a procedure for chasing debtors. Sending out reminders a week or so before payment is due and then following that up with a call if the money is still not forthcoming will help you to stay on top of your finances.

• Know your customers! Some of your customers will regularly pay on time – others will be perennial late payers. The more information you have about the customer, the easier your payment collection process will be. Keeping organised, written records on each account will help you avoid any nasty surprises.

• Don’t always associate higher sales with better cash flow. If large portions of your sales are made on credit, when sales increase very quickly, your accounts receivable increase, not your cash. Meanwhile, stock is depleted and must be replaced to cater for other customers. Because receivables usually will not be collected until 30 days after sales, a substantial increase in sales can quickly deplete your cash reserves.

• Consider using an invoice finance provider if you get into trouble. These are financial services businesses that can pay you today for invoices you may not otherwise be able to collect on for weeks or months.

• You may be able to raise cash by selling and leasing back assets such as machinery, equipment, computers, phone systems and even office furniture. However, be aware that you could lose your assets if you miss lease payments.

• If your cash flow has become stable and predictable, you can consider investing your excess cash. Or you could earn additional income through interest, as well as having the necessary cash to dip into during tough times.