This year may have been filled with a bit of emotional turmoil from all fronts in our daily lives. The results of inflation for business owners are costing sleepless nights worried about juggling vendor bills and how they will make payroll each month.
Closing the books on 2023; the 3 biggest financial problems I am seeing are:
1. Draining Bank Accounts – Caused by Inflation? Owners are spending more than they are bringing in cash collections. Everything appears to cost substantially more in 2023 from supplies to paying for employee wages. On the other side of the equation, sales seem to be flat with not much of an increase over this time last year. Net effect is more money is going out each month than is coming in, which takes a toll on CASH FLOW!
2. Accounts Receivables are Becoming More Challenging: If you as the business owner are struggling with cash flow; consider how your customers are also struggling. Several of my client’s clients have gone into bankruptcy this year making it harder to collect on A/R. What are your processes to collect more money faster with your customers so you may have a positive impact on accounts receivable? Struggling to collect money from your customers results in reduced monthly revenue.
3. Credit Card Debt and New Loans: Looking at your Balance Sheet, are you seeing credit card debt increasing? Did you have to draw on a Line of Credit because of monthly shortfalls in cash? Did you take on a new business loan in 2023 to help pay the bills and make payroll? The time is now to create a debt servicing strategy to help stop the bleeding of cash!
A HOLIDAY FULL OF FINANCIAL JOY
Going into 2024 with more debt, less cash, and revenues that are not producing a minimum of 10% Net Profit to Revenue Ratio will result in more anxiety and stress.
The #1 action that I want to encourage business owners this holiday season is to think about ONE money habit you are willing to change to make a difference in your financial story.
Give your business the gift of a Cash Flow Optimizer Package (Click to Learn More). Let us bring the discipline of managing cash flow PRO-ACTIVELY monthly. This will result in cultivating good money habits that will lead to PEACE of MIND.
Often compared to the lifeblood of a business, cash flow remains as perplexing as it is crucial. It’s the liquid asset that fuels your operation, yet it’s also a convoluted concept that can lead to the downfall of otherwise promising enterprises.
The 4th quarter of any fiscal year is a labyrinthine maze for business owners — it is complex, but it is not impenetrable.
There is no time to waste if you see your business struggling financially. The easiest approach is to seek out a leader to help. Investing in professional Cash Flow Services is like having a compass, a map, and a seasoned guide in this complicated journey.
Guide to Cash Flow Management
Through careful planning, real-time tracking, and strategic foresight, business owners can navigate effectively. Keep these tips on hand:
Keep a Cash Flow Forecast: This is the business equivalent of reading maps. Know what lies ahead.
Monitor Receivables: You can’t solve a puzzle with missing pieces. Ensure that all expected payments are on track.
Streamline Payables: Recognize when to hold back and when to release. Timing is crucial.
Emergency Reserves: Store the acorns for winter; an emergency fund is vital.
Regular Review: Constantly scrutinize your financial records as if they are riddles waiting to be solved.
Consult the Experts: Seek professional cash flow services to show you the path to a profitable future months.
A cash flow expert is a game changer in making owners masters of their financial maze. As a partner, I offer my knowledge and can change owners financial attitudes, habits, and management to lead them to their finanical goals.
Start the road to financial freedom and cash flow confidence using Debra’s methodology to forecast 8 months into the future. Here is a quick video to learn more about cash flow forecasting: CRM Cash Flow Forecasting – YouTube.
Gain confidence with a 5-Minute Read. Update your cash flow knowledge in a library full of monthly blogs from Debra’s resourceful Knowledge Bank. Such blogs discuss:
How Much Cash on Hand is Enough? Cash reserves/cash on hand are the amounts of cash accessible to a business once outstanding balances have been paid. It’s an important metric to measure and determine what amount is enough for emergencies or dips in business. How much do you need on hand? Read More...
The Bad Money Habits You Need to Break – 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. Read More…
The Role of your Bookkeeper – Most business owners think of their CPA as a go to expert for financial reporting, when in fact they should be going to their bookkeeper – The keeper of the cash flow. Read More…
Where is your Company positioned in the Cash Flow Arena? It is not uncommon for a company to show a net profit on their income statement and still find that they are having shortfalls of cash each month. Why is that? The art of managing cash flow is to look 90 to 120 days into the future. My cash flow optimizing package forecasts 8 months into the future to predict a likely outcome. Full Article…
Centennial Revenue Management works with small business owners across industries whose needs extend beyond the basics of revenue management into total control and fiscal health.
What is your definition of cash flow? Simply put, it’s money in and money out of your business = CASH FLOW. Would you say your company is having good cash flow? Are you profitable, and you think that means you must have good cash flow? Are you accruing credit card debt and that means you are experiencing poor cash flow? From my seat at “your table” I would tell you as a CFO/Cash Flow Strategist, that to have good cash flow means:
Your Net Profit is a minimum of 10% of your Gross Revenues. If your sales are $100k/month, your Net Profit should be a minimum of $10k/month.
Your Net Profit % needs to be higher if you are servicing debt and/or taking owner distributions. These items are posted on your Balance Sheet and do NOT affect Net Profits!
You are adding more money each month to your bank accounts that helps you achieve 3 times your monthly payroll expense. If your payroll is $50k/month, your total cash available to you should = $150K at the start of each month.
Key Strategies for Optimizing Cash Flow in Today’s Business Environment
From my experience in today’s environment, most business owners are spending money as fast as it is coming in and then some. Being accountable and aware of the movement of money in and out of your business is the most important step toward optimizing cash flow.
Top 5 Strategies that I highly recommend paying attention to optimizing cash flow are:
Bring outside eyes to your financial arena: Take the time and consider investing your money into a Fractional CFO / Cash Flow Strategist. I help my clients understand how to read their Profit and Loss and Balance Sheet from a CEO’s perspective rather than from your CPA’s perspective.
Learn to “follow the money” from a Profit and Loss to the Balance Sheet:I defer to #1 above. Do you know how to read your P&L and Balance Sheet on a monthly basis?
Implement an Accounts Receivable Process (Money In):This is the money that you have earned and want to come in as fast as possible. How do you ask for money owed?
Implement an Accounts Payable Process (Money Out):This is money going out that you want to slow down and control how you pay your vendors.
Work from a Budget that is created from proactive strategies:I say it often; cash flow is not about the next 30 days as that money is already in play. You need to plan for the next 90 to 120 days from now.
Optimizing cash flow will take creating some proactive strategies! Partnering with an Outsourced CFO / Cash Flow Expert can help to empower you to increase your cash reserves and profitability. What if you could learn to manage the outflow of money against your revenue trends and make a profit and optimize cash flow?
Want to understand how to read your financials from a CEO’s perspective and not rely on your CPA and/or Bookkeeper to interpret your financial story? Connect with me for an hour and I will tell you what your financial story is from a CEO’s perspective.
We’re thrilled to announce the exciting rebranding of our SWOT package as the Cash Flow Optimizer Package!This offering still provides all the incredible benefits you know and love, including the delivery of an eight-month cash flow forecast directly tied to your current financial story, guidance on maintaining minimum cash balances, a comprehensive analysis of your current situation, and a personalized one-on-one consultation to understand your cash flow forecast.
Experience the power of optimizing your cash flow with our newly renamed package, designed to help you make smart short-term decisions and secure a prosperous future for your business.
Get back to business with a Cash Flow Consultant / CFO at your side.
Are you a business owner that surrounds yourself with subject matter experts? Or are you wearing many hats to take your business to the next level? As a small business owner, you are most likely filling the role of a CEO and CFO and maybe even doing your own bookkeeping.
Outsourcing your CFO can help alleviate the burden of financial management and enable you to concentrate on the revenue-generating activities that are crucial to your business’s growth.
Did you know the #1 Dirty Little Secret About Cash Flow is: “It’s not about the next 30 days, that money is already in play. You need to look 90 to 120 days from now to know if you are going to have good cash flow!”
Maximizing Cash Flow: The Benefits of Hiring a CFO/Cash Flow Consultant
When Should You Hire a CFO / Cash Flow Consultant: In today’s business landscape, outsourcing is a less expensive way to go when wanting to “hire” your subject matter experts!
Benefits that a CFO Cash Flow Consultant Can Provide: We cannot be “experts” in all aspects of our business. The goal is to look at the good, the bad, and identify what is not working.
Who is Watching Your Cash Flow? Take Advantage of the SWOT Analysis Package before Investing in a CFO. If you want to know where you stand, take advantage of the SWOT Analysis Package – strengths, weaknesses, opportunities and threats. Click hereto learn more about this offering.
Be PROACTIVE, not reactive with your financial strategies. Now is the time to collaborate with a CFO/Cash Flow Consultant to help you take charge of your cash flow!
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Discover the Benefits of Outsourcing a CFO in this Video
Meet Debra and learn about Centennial Revenue Management and outsourced CFO
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.
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Take a big step and invest in your financial health and contact Debra today for a 6 month CFO / Cash Flow Package.
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As a business owner, it’s essential to have a deep understanding of your finances to make informed decisions and drive growth. An outsourced CFO can provide you with the education and insights you need to succeed. Click below to learn more about Debra’s 6 month CFO/Cash Flow Package and take a big step towards a brighter financial future.
Let’s go back to the early years of your business. How in control were you?
I have learned that all my clients began their businesses with very simple practices. As their business grew, the focus strayed away from those fundamentals. Pivoting them back to these basics, I am reintroducing the 1, 2, 3’s of cash flow to ensure business thrives.
Basics of Cash Flow
It’s not about the next 30 or even 60 days that affects cash flow. That money is already in play. If you want to make a difference in your cash flow arena, you need to look 90 days into the future. Create a strategy today to get a different outcome in increasing your cash in the bank.
Quickly Identify, Yes or No?
Is your bookkeeper keeping your financials current? (If no – how do you make good PROACTIVE financial decisions?)
Do you have an accounts receivable process? (If not, how do you ask for money that is owed to you?)
Do you have an accounts payable process? (If not, how do you control the outflow of money against what you are collecting each month?)
Do you have a debt servicing strategy? (If not, paying when you think you can let go of money is like throwing noodles against the wall.)
Tips:
Get involved and don’t handle business financials alone.
Gather a team of financial experts – Save money and be rest assured that you have guidance to make the right decisions with money.
Money going out of your business should be slow and controlled. If you can control your outgoing cash, you can control your cash flow.
Financial Habits –
Now more than ever, it is important to keep yourself financially educated to be empowered and to have peace of mind. Consider these valuable insights for building a strong financial arena:
Get back to basics, to maximize net profits, optimize cash flow AND get more money in your pocket!
EASY AS PARENTING, HA!
Alike raising a child, a business takes a village. It is a full time role to ensure the fundamentals stay in play through the growth of the business. Creating routine check ups will help a business mature to run successfully on its own.
Schedule a Financial Check Up – Too often, financials are only looked at in the rear-view mirror, yet business success depends on managing to the future.
Start with answering these questions:
What is your cash on hand balance from last month?
What are your average cash revenues (not accrual revenues), monthly?
What is your average outlay of cash, not total expenses each month?
A lot may have happened over the years, but never loose discipline of having good cash flow. Pivoting back to the basics can lead to big payoffs.
2. Accounts Receivables are Becoming More Challenging: 
