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
Why don't employers see the huge CASH cost of losing their best people, and give them what they need to stay?
Employers spend a lot of extra money when they lose their best people. Here are some of the incremental hard costs:
- Training costs for a new person
- Recruiting costs
Even bigger are the "hidden" costs:
- Employer's time to recruit
- Lost productivity
- Emotional cost to the team
What would it take to keep the best people?
1. Ask them. They'll tell you.
2. Some money. Less than replacing them.
3. Recognition. Get creative and see #2.
4. Bonus idea: Reward them with something that benefits their significant other and/or family.
Back to the cold hard cash facts. Studies show it costs you 33% of someone's annual salary to replace them. You can keep people for a lot less.
Am I right? Wrong? What's your experience?
Let me know in the comments below.
#wtcfg #humanresources #finance
The first time I went skiing as a teenager I watched my classmate beautifully ski down the hill and, in slow motion, turn gently to the left and ski into a barn.
The barn wasn't anywhere near the bottom of the run. It was way far away and posed no danger to anyone. But as the instructor shouted "Stay away from the barn!" her turn became sharper until she was pointed directly at the big, red barn!
I suspect that her problem was that she focused on "not hitting the barn" instead of going straight.
That's a lot like when in business we are focused on preventing a result instead of focusing on the result we do want. We often end up "hitting the barn" instead of getting the result.
When I ski and I'm moving fast, I always need to focus on where I need to go and I consciously block thinking about obstacles that could cause danger. I know the danger is there, but I focus on where I want to go.
The same in business. Focus on where you want to go.
I'd love to hear any comments you've had, or...
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.
In this episode, I discuss the ins and outs of calculating cash flow.
Click here to listen on Google Podcasts.
Have an idea? Anything I missed? Let me know in the comments below.
I just came across this favorite Cash Management Minute, and find its principles to stay true as ever.
It is much more effective to decide what to do instead of what not to do - in skiing and in business!
Does anyone else find this to be true? Or are you looking forward to hitting the slopes this winter like I am?
Let me know your experiences (or your favorite place to ski) in the comments below!
Strategic Action Plans
You know where you are today. You know where you want your business to go. So why is it so hard to change?
Because making real changes in a business takes big, bold shifts in actions, attitudes, and thinking.
You know all of that, so why is it STILL so hard to make changes?!
Because most business owners and managers are so busy working on the day-to-day challenges of running an ongoing business that it is next to impossible to focus on the work needed to create change.
Strategic action plans identify the changes that need to be made in a business and then break them down into achievable tasks that can be accomplished in 1-2 weeks. Most of the time an individual task doesn’t make a major change in a business. But ask yourself, ”What would happen to my business if every week I can implement just two small changes that would move my business in the direction of my ultimate goal?”
Two changes a week would mean 26 changes for your business in the...