“It takes 21 days to break a habit.” That’s how the old adage goes. Unfortunately, experts have agreed that this simply isn’t true – but don’t be discouraged. In my two-plus decades of working with business owners from various industries, I’ve encountered quite a number of bad habits. And fortunately, with some diligence from the business owner alongside education and support from myself and the rest of their team of financial experts, I’ve seen those bad habits broken with big payoffs. What follows is a selection of some of the most common bad habits I’ve encountered during my time as a cash flow specialist, as well as how to address them.

Comingling money between business and personal finances
It’s important for business owners to remember that the company is not their personal cash bank account. Keep business and home separate! One of the easiest ways to break this habit is by opening a business credit card account that you use exclusively for business needs and expenses. This will help you avoid intermingling expenditures and simplify matters related to budgeting.

Racking up loans or credit card debt to buy what you “want”
While it can be tempting to use your line of credit to invest in things like new software or technology, this kind of spending can quickly get out of hand and leave your business in a cash flow crunch. If you cannot pay off your credit card each month, it is a red flag that you are spending more than your monthly budget can support. Create a proactive debt servicing strategy to eliminate credit card debt before buying things when you want them, at least until you can afford them.

Not having an accounts receivable process
Money that is owed to you is an important component of cash flow. By not having a good process in place to ask for money that you’re owed results in minimizing your cash on hand balances. The ideal timeline for collecting outstanding receivable is 45 days. Our recommendation is to assign an “owner” to this process to remove the emotion felt by the owner when clients are late in paying their bills. Some techniques we use include sending courtesy reminder statements and doing client relation touches to be sure the invoices are going to the correct person. Hopes and prayers are not a proactive strategy in collecting more money faster in your cash flow equation.

Not having an accounts payable process
Money going out of your business should be slow and controlled. Consider paying your company bills differently than the way you would pay your personal bills. For example, you may pay your bills at home as soon as they come in so you don’t forget to pay them; however, this is not a great strategy in the business arena. This component of cash flow should have a process in place that is based on a monthly budget as opposed to paying bills by “robbing Peter to pay Paul.” Pay attention to vendor terms and create a system that is followed on a weekly or bi-monthly basis which aligns with your payroll cycle. Look at your Balance Sheet to see how much money is available to pay bills – not your online banking account.

Trying to do it yourself
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. A bookkeeper can regularly post your money coming in (revenue) and money going out (expenses) to keep you aware of your financial picture (in good times and in bad), so that you can be more prepared when challenges arise. A cash flow specialist can then use those numbers to build valuable cash flow forecasts, eliminating the stress of uncertainty.

Don’t let these bad money habits stifle the success of your business. Take back financial control and learn how to be proactive by scheduling a complimentary consultation with me at the number below.

Centennial Revenue Management has tools to help, including templates and spreadsheets to help organize your PPP usage and monthly forecasts. Contact me today at
or at 303-835-7992.