EIDL Loans – Accrued Interest; Are you Aware?

EIDL Loans – Accrued Interest; Are you Aware?

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.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 SecretFrom 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).

Who’s Managing the Life Blood of Your Business?

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?

Moving Into a New Normal Will Take Some Strategies – Check out the steps to keep you on track https://centennialrevenuemanagement.com/whos-managing-your-cash-flow/

  • 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 Government money has arrived! Now What?

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
or at 303-901-4823.

The Bad Money Habits You Need to Break

“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.

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 determining the correct amount can help business owners get a full perspective of their business’s health while reducing the stress that accompanies uncertainty.

However, it can also be a major pain point if cash flow isn’t optimized. For example, if your ending cash on hand balance for May was $30,000 and your monthly payroll is $50,000, you’re likely struggling to make payroll each month and pay your vendor bills. This is because there is simply not enough cash on hand on a monthly basis.

Identify your cash on hand

To identify your cash on hand, simply look at your balance sheet (not your online banking account) ending on the last day of the previous month to determine the ending cash balance going into the current month. Once you have this figure, the next step is uncovering where your cash on hand needs to be in order to produce the best cash flow results.

There is no magic number

Unfortunately, there is no magic number that determines the right amount of cash on hand. This important figure varies from business to business. Essentially, the sweet spot for a particular business can be determined through cash flow forecasting. The most effective ways to conduct cash flow forecasting are either by working with a cash flow specialist who focuses on these metrics, or by using cash flow forecasting software. The best versions of this software can provide an 8-month projection of the beginning/ending cash on hand balances based on a 4-month trend of the user’s business financials. It should also allow the user to easily plug in different metrics, such as projected monthly revenues and projected monthly outlays of cash to create the forecasts that will be most helpful to them.

If you’re wondering what your cash on hand balance should be, consider these scenarios:

  • Should your beginning/ending cash balance be 2x your monthly payroll amount?
  • Should it be equal to the average monthly outlay of cash, meaning are all of the expenses paid on your profit and loss + debt servicing + owner’s distribution?
  • Should it be 3x your monthly expenses?

The Bottom Line

Bottom line, this figure is different for every business. It’s best to educate yourself on what will work best to help optimize cash flow, and if you are not doing any cash flow forecasting, you are basically “winging it.” Stop being reactive and acting upon the feeling of pain each month when you are struggling to make payroll or paying your vendor bills. Learn to be proactive, create a strategy to help you know what this key figure should be and feel empowered when reviewing your monthly financials.

To understand what this looks like in “real life,” let me share an experience I had working alongside a CPA and a dental consultant for a dental practice. The CPA was focused on minimizing the bottom line to help reduce tax liabilities. The dental consultant was focused on production to collections and driving the dental team toward that production number. They were following the numbers in their dental software and not watching the balance sheet. My role was to follow the money into the bank accounts, and record those balances on the balance sheet. This added another level to the financial conversation because until I brought all the pieces of the financial puzzle together, the consultant was not including debt servicing in their conversation to drive the production numbers. At the end of the day, the dentist could see that we needed to add another $10K to the production goals to help manage the cash on hand balances so that the practice didn’t run out of money or struggle with low cash balances each month.

From my seat at the table, the correct amount of beginning/ending cash balances will be defined by how easily a business owner can find peace of mind at the end of the day and go to sleep without worrying about cash flow each month.

Find confidence and comfort in the financial health of your business. Schedule your complimentary consultation today by calling (303) 835-7992.

Navigating Cash Flow Amidst COVID-19 and Beyond

“Wisdom is knowing what to do next. Skill is knowing how to do it. And virtue is doing it” – David Starr Jordan
Read on for guidance on your next steps:

As you navigate the business challenges resulting from the pandemic, you may have been funded for the PPP loan and/or received some of the EIDL grant/loan money. I hope that if you needed it, you were funded. The business owners I am speaking with are faced with the good news of receiving the money and the bad news that businesses are still sheltered in all the way through June in some states. What now? How do you work towards qualifying for the PPP loan forgiveness if you only have eight weeks to do so and you still aren’t open for business? And more importantly, how do you protect the health of your business beyond that timeframe?

Examine your PPP Loan Forgiveness

If you received a PPP loan, you should already have a plan in place for how to best utilize the money. Explore what are eligible deductions that you will be allowed to take when you file for loan forgiveness. It’s important to understand now what the eligible expenses are and how will they be calculated. Collaborate with your cash flow specialists, CPA and banker who helped to get the loan funded. Working with your team of subject matter experts will serve you well.

Become One with Your Cash Flow

We don’t mean to imply that you have been ignoring the importance of cash flow until now, but the stakes have never been higher and it’s crucial that you understand the ins and outs as well as the possibilities for what might happen. Consider running scenario analyses on your cash flow forecast to determine how it affects short-term liquidity requirements. This can help you determine your company’s ability to pay off short-term liabilities, allowing you to plan with precision. You’ll want to consider that if you did receive PPP funding, that will likely not sustain you past a few months. Once you can manage these components, then you are ready to project what will be needed in order to sustain your business. Resist the urge of going back to your old ways of managing cash flow with more debt.

Be Vigilant on Cost Control

Cost-cutting measures can often serve as life rafts in turbulent times, but it’s important to weigh the benefits before slashing expenses. It may make sense to reduce your company’s travel budget with the increased use of video conferencing. Many major events and meetings have been postponed until next year or have shifted to a virtual platform. Also consider examining non-essential costs like online subscription services or office snacks. On the flip side, it likely doesn’t make sense to eliminate your bookkeeper. Yes, there is a cost associated with that resource, but is it wise for you to take on that extra responsibility right now? Cut the costs that cause inconvenience or annoyance, not those that are critical to the health of the business’s health functionality. Too, make sure that the measures you’re looking to cut don’t actually bolster revenue in a way that may not be readily apparent on the surface.


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 303-835-7992.

A CFO/Cash Flow Expert can help you identify the important components of your cash flow arena that need special attention in the next 30-60 days. In order to be proactive – not reactive – it’s necessary to understand what your financial position was going into the pandemic. Were you already having a cash flow problem? What was your starting cash balance going into April, for example, before you received any funding? What were your average revenues coming in against the average outlay of cash going out (including debt servicing)? All of these questions tell the story of how your business was managing cash flow before COVID-19, and will help you to navigate the future of your business.