What's the one thing that business owners never talk about when I ask them to tell me about their business?
I don’t blame them. They didn’t start their business to manage cash. They started their business to do something they really enjoy and get paid for it – like create websites, sell real estate, practice law, do collision repair, or any of a million things that people enjoy doing to make money.
When I start working with a business that has a cash crunch and may not survive, I first work with the business owner’s mindset.
I help them understand that while managing their cash isn’t what they want to do, it will keep their business alive so they can do what they love to do. It allows them to spend more time and energy on what they love, but only after their cash management systems are in place.
Check out my article about 5 Key Mindsets.
Want to talk about managing cash in your business?
Then tell me, what's your biggest cash management...
Are you a cost center or do you provide a documented return on investment (ROI) for your clients?
Most companies, non-profits, and government institutions view accounting, bookkeeping, tax preparation, and financial analysis as an expense that needs to be endured. Because of this, they often look for a low-cost provider that meets a minimum standard, like a certification.
Examples would be a QuickBooks Advisor, accounting degree, or CPA or Chartered Accountant.
There are literally millions that have certifications of each type.
What if you could show an ROI to clients?
Show them that for every dollar, pound, Euro, lira, or peso they spend they get to save or make 5x, 10x, 100x, or even 1,000x what they spent?
The best way to do that is through advisory services which help improve a company's financial performance.
Cash flow management isn’t about money. It’s about getting your life back.
I’ve worked with business owners who were sick with concern, fear, and doubt about how they will make payroll, meet bank covenants, and literally keep the lights on. They've told me with tears in their eyes that they don't know if they can survive past another payroll. Their spouses express concern about the health and well-being of their partner.
By focusing on cash flow - when and where cash was coming and going from the business - they were able to turn around the business completely, or stay afloat long enough to sell the business.
And yes, some businesses fail, but it’s because of a fundamentally unsound and unsustainable business model.
If you or someone you know have good sales and margins, but are struggling to have the cash to pay the bills, get help.
Open up to someone who can integrate and monitor a cash flow model with your company’s financials and help you make decisions...
Want to solve 80% of your bookkeeping needs to solve cash flow management issues?
Then do two simple things:
1. Reconcile your books every week without fail. Do it on Friday, last thing so you are ready to update your cash flow projections on Monday.
2. Create bookkeeping reports that give you insights into the key cash flow indicators that you need. One example: Accounts receivable aging.
Is there something else that you think needs to be done?
Let me know in the comments.
#tcmp #bookkeeping #reporting
Are there any accountants out there that would like to convince me that accrual accounting is better for a small business than cash accounting?
I'm talking about having a discussion, not an argument. An exchange of ideas and open minds. We can have a civil chat and explain to each other why we think our idea is better.
I believe that cash accounting is the only way to go for small businesses unless accrual accounting is required for a bank loan.
How small a business?
Let's start at the $25,000,000 mark. That the IRS limit established in 2018 before you need to do accrual accounting for tax purposes.
I am guessing that there are a few accountants out there that disagree with this position!
Are you interested in having the conversation?
Please let me know in the comments!
#accounting #wtcfg #bookkeeping
Do you know that crowdfunding can be an effective cash management tool for raising capital?
Crowdfunding is pre-selling products that are in development. You owe people something, but usually at a good profit margin. You don't sell equity in your company and you don't go into debt. You do get:
- Publicity before you launch
- Feedback on your product
- Ideas for additional product
- An idea for market acceptance
- Names for your mailing list
- The cash you need to launch the product or business
Most people think of Kickstarter or Indiegogo (I've used Indiegogo) as only for new companies...wrong! You can introduce new products as well.
I've done crowdfunding for non-profit as well as for-profit organizations. Possibilities for funding:
- Book launches
- Food vendors
- Service providers
- Race/adventure organizers
- Non-profit fundraising
The possibilities are literally endless.
Have you done any crowdfunding? I'm looking for any reason not to do it.
Have you bought something from...
If you are interested in learning more about cash flow management, then you should follow Barb Easter, Blaine Bertsch, and Jeremy (JD) Burke from Dryrun - Cash Flow Management Software. These hyperlinks will take you to their LinkedIn pages.
Why would I recommend you follow someone else and not spend all of your cash flow time on my posts and articles?
A few reasons:
1. They have a great point of view
2. They work with end-users and finance professionals from all over the world
3. DryRun is the best cash flow management software I have seen so far for businesses over about $1 Million in revenue
4. They are educating the marketplace
I'd love feedback on what you think about DryRun software.
Do you use cash flow management software? Or spreadsheets?
If so, I'd love to hear your opinion on your software or why you use spreadsheets.
What do you like? What doesn't work? What else do you need?
Let me know in the comments below!
#tcmp #finance #bestadvice
*I am not...
Follow this link to listen to the episode on Apple Podcasts.
I had a great time on The Courage to Lead with Harlan Hammack discussing cash flow optimization (including some counterintuitive tactics), planning for the future, explanation of some of my offers here on the website, and more.
I also got to share a bit more of my own story of how I came to be involved in cash flow advising. It was not an easy decision, but it was a logical one.
Coach Harlan was a great host - big thanks to him!
Follow this link to listen to the episode on Apple Podcasts.
I love seeing the wide variety of businesses around the world. It’s one of the reasons that I enjoy working with small to medium sized businesses – there is so much variety and so many ways that people have figured out how to make money. They are so innovative, and it seems like it would be so fun to be part of the team!
These companies generally have:
After that the business often has weak spots. They generally lack systems and operations that will allow them to scale, especially when it comes to accounting, finance, and cash management.
Between my experience and the conversations that I’ve had with various accountants, bookkeepers, and business consultants, I’m convinced that 90% or more of small and medium sized businesses don’t have good financial management. This includes basic...