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Getting Started with Cash Flow Management and Advisory Services: Empowering Business Owners

Uncategorized Jun 17, 2024

As a financial professional, one of the most important things I've learned is that business owners value control in every aspect of their operations. This desire for control can sometimes be the reason why they haven't started working on their cash flow management. Our job as advisors is to help them understand that they have more control than they think over when money comes in and out of their company.


Many business owners are stuck in a box when it comes to how they get paid. They may not realize that there are various options available, both in terms of the mechanics and timing of payments from clients. Similarly, they may not be aware of the options they have when it comes to paying their own bills, such as paying late if needed or taking advantage of early payment discounts from vendors.


To be an effective cash flow advisor, I recommend learning how to manage cash flow using a spreadsheet. While automated software can be helpful, starting with a spreadsheet allows you to get organized and communicate effectively with clients who are often more familiar with this format. Once you have a clear understanding of the process, you can then transition to automated software, ensuring that the client's system is in good shape to avoid magnifying any existing problems.


In addition to developing technical skills, it's even more crucial to cultivate the mindset of a professional cash flow manager or advisor. This involves thinking creatively about how to work with clients, their books, and their internal systems, all of which directly impact cash flow. Mindset exercises can be incredibly valuable in helping you understand how to tackle cash flow challenges and translate this knowledge to your clients.


Some examples of mindset exercises include finding the root cause of cash flow issues by digging deeper and not just focusing on the numbers, which are merely symptoms. Another exercise is learning to fire unprofitable clients, which can be challenging in a society that often equates revenue with success. By sharing these exercises with your clients, you can help them better understand the importance of effective cash flow management.


In conclusion, empowering business owners to take control of their cash flow requires a combination of technical skills and the right mindset. By expanding their understanding of the options available and providing valuable insights, you can become a trusted advisor and help your clients achieve financial success.


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