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 FlowIt’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.)
- 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:
- Follow the Money
- Break Bad Money Habits You Need to Break
- Understand How Corporate Taxes Affect Your Personal Return
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.