Five Top Strategies to Optimize Cash Flow As Your Business Recovers From the Pandemic

Many business owners try and tackle their financial situation alone with the notion that they’re saving money. The truth is, hiring a team of financial experts can actually save you more money than the fees of its respective members.  Adding a CFO and/or Cash Flow Strategist to your financial team, is an investment that owners will reap rewards from long into the future. A business is only as strong as its cash flow. Becoming proactive in creating strategies to help you not run out of your PPP money, is the goal to recover strong out of the pandemic!

From my own experiences, most business owners are spending money as fast as it is coming in and then some.  Being accountable and aware of your business spending is the most important step towards finding solutions towards money woes. What were your money habits going into the Pandemic?  Did you already have a cash flow problem and were “saved” by the PPP gifts and EIDL Loans?  Have you taken the time and put forth the energy in rebuilding a more solid financial foundation?

Spring is upon us! Let May be the month that you plant the seeds to a good financial garden and begin to watch it grow.  Centennial Revenue Management wants to help you get off to a good start! Take advantage of the Spring SWOT Analysis Package – strengths, weaknesses, opportunities and threats. This snap shot will help you to plant the financial seeds to build a strong financial foundation.  Click here to learn more about that offering:

Now that you are sitting on more money in your bank accounts then ever before, what will you do to ensure and empower yourself that you will not run out of money by the end of this year?  The Dirty Little Secret about Cash Flow is that it’s not about the next 30 or even 60 days from now.  The sweet spot is 90 to 120 days out to see if you are brewing a cash flow storm or will already be in one!

Top 5 Strategies that I highly recommend paying attention to when creating a plan in the very near future.

  1.  Bring Outside Eyes to your Financial Arena:  Take the time and consider investing your money into a cash flow expert that can identify the top money habits that you can change to get a better outcome with managing cash flow.  If you went into the Pandemic with a cash flow problem or already struggling with cash flow; it’s more than likely you will come out of the Pandemic with the same cash flow problem.  It will just take a longer time to spend the cash reserves that you have stashed from all the loans the government gifted you!
  2. Identify what your Average Monthly Revenues are each month:  To determine this number, I recommend using a 4-month trend taking the total of CASH revenues (not accrual) and divide by 4 months.  This will tell you a starting place of what your monthly revenues are likely to be in the months ahead.
  3. Next up; Identify your Average Monthly CASH Outlay:  To determine this number, you need to look at both the Profit and Loss and Balance Sheet.  On the P&L, I also recommend looking at the total of 4 months of Expenses on a CASH basis and divide by 4 to get an average monthly amount for each expense line. PLUS, you need to look at the Balance Sheet and determine the monthly amount of debt servicing and Owner Draws/Dividends that are being posted.  The total amount will get you close to understanding what your Average OUTLAY of cash is each month.
  4. Implement an Accounts Receivable Process:  This is money that you have earned but have not yet collected.  Anything over 45 days outstanding is “low hanging” fruit in the cash flow arena and should be aggressively pursued to collect from your clients.  First step in implanting a process is to assign an “owner” on your team to make client relation calls and send monthly statements asking for money owed.
  5. Implement an Accounts Payable Process:  This is money going out that you want to slow down and control how you pay your vendors.  I’m not suggesting that you violate payment terms.  I am suggesting that you have your bookkeeper enter vendor invoices into your accounting system and then pay on a weekly or bi-monthly process.  Big picture, you want to collect as much of your accounts receivable as possible, make payroll, pay vendors and service debt with you being empowered by the timing letting money go out of your bank accounts!

Moving into a new normal will take creating some proactive strategies!  Partnering with a cash flow expert can help to empower you to hold onto your cash reserves.  What if you could learn to manage the outflow of money against your revenue trends and make a profit and optimize cash flow?  Take back financial control and learn how to be proactive by scheduling a complimentary consultation with me at the number below.

The goal is to focus on optimizing cash flow and to educate you on what your minimum cash on hand balances need to be to sustain your business in the months ahead.

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Centennial Revenue Management is here to help by creating proactive strategies, identify, and transform money habits to ensure you won’t run out of your money.  Contact Debra today at
drobinson@centennialrevenuemanagement.com or at 303-835-7992.

Your Bookkeeping: Is it good or not so good?

As a CFO, I can tell you that the most vulnerable area in the financial arena is bookkeeping. In my cash flow arena, I refer to the Bookkeeper as the “Keeper of the Cash Flow”! I have learned that one of the most important things you can do to set yourself up for success as a business owner is to surround yourself with people who are great at what they do. My seat at the table in the financial arena is as a CFO/Cash Flow Strategist. Take a moment to identify who your trusted advisors are in the financial arena. Once you have the right “subject matter experts” in your sandbox, you should be able to maximize profitability and optimize cash flow!

Let me ask you: 

  1. What is your relationship with bookkeeping in your business?
  2. You may think your bookkeeper is doing a great job, and “need” to trust that they are, but what if they are not?
  3. Are your financials up to date or are you “winging” it with making financial decisions?

Why do you need a bookkeeper?

You and your Bookkeeper: The bookkeeper is the keeper of the cash flow.  This person is the “subject matter expert” of your books and records the day-to-day transactions accurately. Please, please do NOT minimize the importance of this subject matter expert.

Bookkeeping Hazards: If you are a business owner that has employees, has credit card debt, has a business loan, and/or has clients that owe you money; you can afford to have a bookkeeper on your team. Top hazards that business owners tend to tolerate:

  • Doing your own bookkeeping! I encourage you not to try saving money by doing your own books. Why? This is the highest and best use of your time, and you are not a subject matter expert in “following” your own money.
  • Paying Bills and Accounts Payable: A bookkeeper can set up a process for entering vendor bills and producing an Accounts Payable report for you to see what is on deck to be paid in the weeks ahead.Why? It is important to control the outflow of money against money coming in. Paying bills “carelessly” is not a good discipline in the cash flow arena.
  • Accounts Receivable: It is a challenge for business owners to ask for money owed. Having a bookkeeper set up a process for collecting from your customers removes the uncomfortable feelings of asking for money.Why? You have a 45-day window to collect money from your customer. Each day after that it is harder and less likely that your customer will pay.
  • Who Signs your checks? DO NOT allow your bookkeeper to sign or pay bills through your online banking account(s).Why? This opens a potential area of fraudulent activity (EMBEZZLEMENT) that you can easily avoid by having your bookkeeper set up the checks to be signed and you sign your checks or pay online with a credit card.

One of the “Dirty Little Secrets About Cash Flow” is that most owners are not holding their bookkeepers and other trusted advisors accountable. Having good processes to manage all the bookkeeping activities helps optimize cash flow and maximize profitability. Do not minimize the importance of bookkeeping in your business. You are as good as your team.

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If you need support with collaborating with your CPA, I welcome the opportunity to help.  Find confidence and comfort in the financial health of your business. Schedule your complimentary consultation today by calling (303) 835-7992.

What Does Cash Flow Mean in a Pandemic? Are you Prepared?

What is in store for your business in the coming months as we can see a light at the end of this Pandemic tunnel. I implore you to ask yourself these questions:

  • Do you still have cash in the bank to make payroll and continue to navigate these uncharted waters?
  • Are you going for another round of funding to help your business survive and/or thrive?
  • How much debt are you carrying when your new loan payments kick in?
  • Will that funding be enough to get you to 2022?
  • Or, will you run out of money in 12 to 18 months because you are still spending more money each month then your Revenues can support?

As a business owner or CEO, your perspective on financials should be different from your CPA’s or bookkeeper’s. It must be based on understanding the full impacts of cash flow so that the integrity of your financials enables you to make sound business decisions. Do not ever make decisions based on your net profit alone. Especially if you are servicing debt!

Cash is King!  It is especially important to pay close attention to cash flow now more than ever! I know many business owners that are sitting on a “boat load” of cash from receiving grants and EIDL loans. I also see a storm in the making if business owners do not take the time to educate themselves on cash flow in their businesses. Whatever money habits business owners had going into the Pandemic and losing control of their revenues, it is likely that those same money habits will slowly drain those cash reserves in 2021.

Set yourself up for success and find empowerment and peace of mind in your financial arena. Every business owner needs a three-dimensional view of cash flow. Consider these three components in the cash flow arena:

#1: Look in the rear-view mirror to assess how your business is trending. What is the average monthly outflow of cash compared to your average monthly cash revenues?

#2: Identify your monthly budget to control the outflow of money against the money coming in.  (This includes debt servicing, owners draw, equipment purchases.)

#3: Forecast cash requirements in the months ahead for things like taxes owed, additional payroll and past due vendor bills to be paid.

My solution is to replace a cash flow statement with a cash flow forecast! The “Dirty Little Secret About Cash Flow” is looking 90 to 120 days from now to see how much cash you will still have in the bank. Many business owners are in crises and are watching cash flow on a daily or weekly basis. That money is already in play!

The sweet spot for managing cash flow is 90 days from now. That means you must implement a budget, good bookkeeping, and create proactive strategies to bring more money in then is going out. Or in the case of a Pandemic, create proactive strategies to control the money going out against projected revenues coming in.

Cash flow is not about net profit or net loss. It is about the movement of money into and out of your business and on your P&L and Balance Sheet. If you can learn to accurately project cash outlay against projected revenues is a guarantee to give you empowerment and peace of mind at the end of the day.

Prepare your Business for the New Year; Cash Is King!

As we close on 2020, we all can agree the year has been full of obstacles. Between politics, business and personal struggles; our lives have had to pivot in many ways due to COVID-19. Business owners are one group of many that have been affected the worse over the last year. With shut downs and light foot traffic, owners’ cash flow continues to remain on an ongoing roller coaster due to the stress the pandemic has caused across the world.

However, there have been so many untold blessings. For me, it has been the birth of a new grandson. Although, I haven’t been able to touch him or for that matter been able to see the rest of my children due to long distance; I am thankful they are safe and healthy.

With the right attitude, we all can step over the obstacles and move forward towards the goals we have planned to accomplish. Despite the worry and fear, business owners still can overlook cash flow forecasting, causing them to be more reactive with financial strategies than proactive. This year was the ultimate test to that. As a cash flow specialist, I am no stranger to combatting financial turmoil.

Keep in mind that a CPA or bookkeeper, tracks PAST spending and offers tax preparation. When reviewing cash flow, a cash flow specialist offers a FORWARD – looking solution. In order to survive, owners be conscience of their spending ahead of time. How are your habits? Are you finding funds draining fast? Have you had to shut down?

After the holiday rush and a well-deserved rest, I would love for you to attend my Dirty Little Secrets About Cash Flow webinar on January 20th sponsored by the Denver / Boulder Better Business Bureau. This virtual seminar will offer many strategies for you to focus on to help you not run out of money as you continue to navigate to your new normal of doing business in 2021! It’s time to be PROACTIVE; not reactive in the cash flow arena!  Click here to learn more about this seminar.

The community needs you to thrive! 

From my family to yours, we wish you a healthy cash flow and happy holidays.

If you need support with collaborating with your CPA, I welcome the opportunity to help. Find confidence and comfort in the financial health of your business. Schedule your complimentary consultation today by calling (303) 835-7992.

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2021 Tax Projections; Ready or Not!

2021 Tax Projections; Ready or Not!

Are you ready with your 2021 projected tax liabilities?

Do you know what your projected tax liabilities will be for 2021? Now is the time to be proactive with your CPA and request a tax review for 2021. 

As we go into the fourth quarter, it is more important than ever to pay attention to your bottom line and cash flow. Optimizing cash flow takes implementing proactive strategies. Oftentimes, a CPA working independently is not proactive about helping you plan for cash requirements for taxes that will be owed in April of next year.

Concerned about your business as tax season sneaks up on us?
As a Cash Flow Specialist / CFO, I am committed to helping business owners understand their financials from a CEO’s perspective, different from your CPA’s.

Think about it this way; your CPA is focused on reducing your Net Profit to help you pay less in taxes.  From a cash flow perspective, you need to focus on increasing your Net Profits that will result in better cash flow.  Working together with these two subject matter experts, can help you to maximize Net Profits, optimize cash flow AND get more money into your pockets!  

You can now plan for how much cash reserves you need to set aside for April of 2022.

You can also create proactive strategies to offset some of those taxes owed before the opportunity disappears by December 31st.

Now more than ever, it is important to keep yourself financially educated to have a healthy business in 2022.  The PPP loan could be considered a great “cash flow” gift.  Do not squander it by not looking into the future and understanding what lies ahead as your business continues to find its new normal.  Achieving cash flow wellbeing takes a team of trusted advisors.

To help you on this journey, and back by popular demand, I am offering my SWOT (Strengths, Weaknesses, Opportunities, Threats) Cash Flow Forecasting Package discounted to $1,500 to help business owners continue to pivot and navigate during these unprecedented times. This is a one time analysis of your current financials.

I will deliver an eight-month cash flow forecast

I will deliver an eight-month cash flow forecast that is directly tied to your financial story in order to educate you on your minimum cash on hand balance needed to sustain your business in the months ahead. I will do a deep dive into your financials, create a working forecast model, and will deliver it to you in a 2 hour consultation.  This process will identify three very important numbers: 

  • What your sales revenue break even number is.
  • What your monthly outlay of cash is including debt servicing, and distributions.
  • What your monthly cash on hand balance is and will it sustain you 8 months from now. 

If you need support with collaborating with your CPA, I welcome the opportunity to help.  Find confidence and comfort in the financial health of your business. Schedule your complimentary consultation today by calling (303) 835-7992.