When was the last time you took a step back and asked yourself, “Is there a better way to really grow my practice?” "Is the path I'm on leading me in the direction I want to go long-term?"
There are dozens of “quick fix” tactics competing for your time and attention, but will any of them drive your practice to the next level? Will any of them provide the work/life satisfaction you're looking for? Probably not, and here’s why:
They don’t address the root cause of job dissatisfaction or anemic growth.
While you’re trying to figure out your best social media channel, how to get found on the Internet, or the best way to get a promotion, you should be looking at:
The COVID-19 global pandemic is a wake-up call to ALL business owners to take responsibility for their company finances.
I posted that financial advisors are responsible for the companies they work with to have good financial plans, including a 13-week cash flow model. Now, I am putting the responsibility 100% onto business owners. There are no more excuses.
For too long business owners have said...
"It's not about the money, it's about the people."
"I do it for the love of my craft."
"Someone else can deal with the finances."
"I want to be my own boss, but so I decide that I only want basic bookkeeping."
Now a tiny virus has told you that you are wrong.
You are in business. Business is about the numbers.
Not only numbers, but if you don't have money, you can't...
...work your craft
...let someone else worry
...be your own boss
If you survive this downturn, fix your finances.
Start with a cash flow model that tells you how long you can survive. (Put "Cashflow" in the comments if you...
No money to pay your bills? Don't borrow money, just don't pay your bills.
You have to pay them at some point, but there are tactics to slow down money flowing out of your bank account.
But FIRST... here are some bills you need to pay on time:
Anything that puts you in breach of contract and puts your business, your home, or your health at risk.
Other than that, most bills can be postponed past the due date without dire consequences.
Look at bills that you owe large corporations, who are used to delays. Telephone, internet, utilities, insurance companies. You may be able to wait up to 60 days without consequences. Let them know when you'll be paying.
Suppliers: Make sure that you talk with them. Make payment arrangements. Don't surprise them. Make a partial payment. Many times your relationship is more important than delaying payment.
Mortgages and rent: Most have a no-penalty grace period. Use it when you need to.
Please, be careful with solo-entrepreneurs and...
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
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.