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.
With increased supply costs, employee wages, and interest rates continuing to climb, the economic environment can be stressful. Many business owners try and tackle their financial situation alone with the notion that they can save money.
The truth is, employing a team of financial experts can result in net savings, as the investment can improve your cash flow and net profits. Additionally, the investment can offer peace of mind.
A cashflow specialist is an expert in designing the road map to build valuable cash flow forecasts which can empower you to project how much cash reserves are necessary monthly.
The Simple Formula for Avoiding a Cash Crunch
Determining the right amount of cash to have on hand each month should not be rocket science. I educate my clients to use one of two goals to help them not run out of money. The cash balance at the beginning of each month should be equal to:
– 3 Months of the total Payroll Cost or – 1 Month Total Outlay of Cash (includes what is posting on your Balance Sheet!)
This important figure varies from business to business. The sweet spot for a particular business can be determined through cash flow forecasting. I educate my clients on the importance of understanding cash flow beyond just the immediate future. Rather than focusing solely on the next 30 or 60 days, I encourage them to look ahead at least three months to predict whether they might face a cash shortage.
Schedule a Complimentary Consultation With Me
Don’t let money slip away so easily. The success of your business relies on financial control. Learn how to be proactive by scheduling a complimentary consultation with me at the number below.
The SWOT Cash Flow Forecasting Packageoffers a unique opportunity for business owners to gain valuable insight into their financial future with a one-time analysis and personal consultation. With my expertise, you will receive an 8-month forecast of your cash on hand balances based on your current financial story, making this package a smart investment in your financial future.
Are you struggling to keep up with increased supply costs, employee wages, and interest rates? Don’t let financial challenges hold your business back.
In this blog post, I share valuable insights on how to effectively manage your cash flow and position your business for success in the cash flow arena. By implementing proven strategies and tools for forecasting and managing cash flow, you can gain greater financial control and stability, helping your business thrive in today’s competitive environment. Don’t miss this essential information – head over to my blog now to learn more!
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.
Did you take on more debt by signing up for an EIDL loan? Have you been funded with 1, 2 or even 3 loans in the last 2 years? If so, please continue to read this very important messagethat I want to convey that you might not realize what you signed up for when you took on more debt from the SBA.
I worked with one of my clients last week to learn about how the payback schedules are going to be kicking in. Most of my clients started receiving EIDL funds in 2020 and then some have taken 1 or 2 more loans. Each time, the government is deferring when your FIRST payment will be due.
SBA Loan – Gift or Burden?
How nice of the SBA to let you know that your loan(s) payments are being deferred for 12 or 24 months from your initial funding. Here’s the kicker…… your loans have been accruing interest from day 1 of receiving those funds. I learned that my client has accrued $14,500+ of interest on approximately $650K loan payoff. I also learned that until the accrued interest is paid off, we won’t touch the principal balance of the loan. Client’s interest is charged at $65.47/day until she is current. Oh, by the way, her first payment is not due until May of 2023 because the govt will defer another 12 months from her last funding. How nice of the SBA, or not???? Who is making money off your debt? Is it a gift or is it a burden?
Steps to Find Your Accrued Interest
Think about that for a minute……If you have not looked into your EIDL loan and are just sitting back waiting for that deferred payment schedule to kick in; I would like to strongly encourage you to find out what the accrued interest amount is sitting on your account. Here are a few steps you can follow:
Find the last email/letter from the SBA that is for the loan. This will be your original loan document or the last AMENDED notice for the loan.
You can call the 800 number on that letter for help. What I learned walking through this process with my client is we went to this website: Capital Access Financial System (sba.gov).
You will need to ENROLL by clicking the NOT ENROLLED link.
You can create your login information. (This is a different site than where you originally signed up for the loan.)
It’s very easy. But, again, if you need help, call the 800 number on the loan document that you have received.
Once you get logged in, it will tell you what the total balance is including the accrued interest amount. This is what needs to be paid before you will start hitting the principal amount.
You will also see when your first payment will be due.
Dirty Little Secret
From my seat in the sandbox as a CASH FLOW expert, it’s important to create debt servicing strategies in line with how your cash flow can support them. Understanding how to manage cash flow takes more than just reading your Profit and Loss. You MUST understand the Balance Sheet that is tracking all your debt. How much you are posting to the principal portion of the loans are posting here. This money going out has NOTHING to do with your Net Profit/Loss.
Proposed Solution
I would welcome the opportunity to help you create those debt servicing strategies from a proactive perspective; not reactive.We are continuing to offer our SWOT Package to help you know where you are currently with your cash flow. The good, the bad and the ugly. Here is a snapshot of what this package can offer: SWOT Packages | Get Total Cash Clarity | Centennial Revenue Mgmt (centennialrevenuemanagement.com).
Don’t wait any longer to be proactive in managing the debt in your business/practice. Cash flow is the lifeblood of all businesses. Just because you may have more money in your bank account(s) than ever before, does not equate to good cash flow. I know all the “Dirty Little Secrets About Cash Flow” in a business. Let me bubble up your secrets to help you learn how to have more money at the end of your month!
As the masks come off and businesses enter a “new normal”, owners are gearing up for what it will take coming out of the Pandemic. As a small business owner, you are most likely filling the role of a CEO, and CFO (Chief Financial Officer). It’s also not unusual for business owners to rely on their CPA’s for a one stop shop to cover all their financial concerns. Could building a team of subject matter experts help you climb your way to recovery?
Let’s take a moment to pause; What does your financial picture look like coming out of the Pandemic today?
– Do you have more money in your bank accounts than ever before?
– Are you willing to consider adding more disciplines in managing your financial arena?
– Do you know how to forecast your cash reserves to insure you will NOT run out of money by the end of the year?
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 here to learn more about this offering.
Be Proactive with Your CPA as you Enter the 2nd Half of 2021: Now is the time to be collaborating with your CPA and CFO/Cash Flow Consultant to plan for end of year tax liabilities.
A CFO/Cash Flow Expert offers security and an education. Offering a different perspective on your financials, a CFO can take a 360 view: not just a two-dimensional view of profits and taxes.
If you are interested in learning more about how I work with my clients providing leadership in the management of financial activities and collaborating with your CPA, I welcome the opportunity to help.
Read more on how to take charge of your financials.
The COVID-19 stimulus bill, signed this March, sent much needed relief payments to tens of millions of Americans. Now that the money has arrived, the biggest question is how to manage it, pay bills, and ensure it carries through longer than six months. Some news outlets are reporting that we still haven’t seen the worst of the pandemic. What’s it going to look like for your business in the month’s ahead? Will your PPP Loan and EIDL Grant monies keep you afloat into next year? Or will you run out of money because your business was already struggling with cash flow going into the Pandemic?
Last month I wrote a blog: The Bad Money Habits You Need to Break: I highlighted the importance of changing the bad money habits that can stifle the success of your business:
– Using your business to fund your personal home budget. What about having a business budget that funds your owner compensation proactively instead of “robbing Peter to pay Paul”?
–Taking on too much debt with loans and credit card debt. Now you took on more debt; what’s your debt servicing strategy?
– Not having an Accounts Payable process. You lost control of your revenues due to the shutdown. Now you as you begin to open; how do you learn to control the outflow of money if you don’t have a good process in place?
Has government money arrived? Now, you may have more money in the bank than you have ever before. Getting the PPP loan will be a gift from the government when you can apply for the loan forgiveness. Do not squander this gift. Use the money to gain control and begin investing in building a better financial foundation for your business.
Here are my top key financial indicators that I recommend you learn from your current financial story. Let’s agree; you may have lost control of your revenues in the past few months and are working on ramping that financial indicator back up. However, you DO have control of the outflow of money. Remember that CASH IS KING. Review your business financials asking your bookkeeper these questions:
1. What is your monthly average outlay of cash? This is not just your total expenses each month. This number includes your average monthly expenses that you track on the Profit and Loss. PLUS it includes what is on your Balance Sheet that has nothing to do with profitability and everything to do with cash flow. This will include (but not limited to):
Debt servicing for your loan principal payments.
Credit card payments.
Shareholder/dividends paid out.
2. What is your average monthly CASH revenue coming in against the outlay of cash going out each month? I will tell you from my experience, most businesses are spending money as fast as it is coming in. If you are a $1M business, you may be averaging $83K/month in revenues. You have to look at the monthly spend on your Profit and Loss + the money that is posting to your Balance Sheet. Then add that sum to the monthly outlay of spend each month. If you don’t know this number, you will most definitely run through your PPP loan in no time.
3. What does your monthly CASH RESERVES need to be maintained to help you sleep at night without worrying about running out of money? Do you even know where to find this number in your financial reports? Here is a Dirty Little Secret: It’s on the Balance Sheet and it will be the total of all your bank accounts when you close your financials the month before. Let’s use the example that you’re a $1M business that is averaging a monthly outlay of cash of $85K/month. Your monthly payroll is probably the biggest expense and it averages $48K/month. Should your cash reserves be maintained at 3 x your monthly payroll expense? Should it be 1 x your monthly outlay of cash? What happens when you have expenses that are above your monthly spend such as, quarterly tax estimates, bonuses, and/or a 3rd monthly payroll that occurs twice a year? Will you have enough in your cash reserves? Or will you have to “rob Peter to pay Paul”?
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. Adding a CFO to your financial team could be an investment into building a more improved financial foundation that allows you to become proactive in creating strategies to help you not run out of your money!
Take back financial control and learn how to be proactive in managing your cash flow. Schedule a complimentary consultation, and let me introduce you to my cash flow forecast processes.
Centennial Revenue Management has tools to help, including templates and spreadsheets to help organize your PPP usage and monthly forecasts. Contact me today at drobinson@centennialrevenuemanagement.com or at 303-901-4823.
Did you take on more debt by signing up for an EIDL loan? Have you been funded with 1, 2 or even 3 loans in the last 2 years? If so, please continue to read this very important message that I want to convey that you might not realize what you signed up for when you took on more debt from the SBA.