It’s so true…
Cash flow is the lifeblood of your business! (ask the thousands who failed without it)
Given that, I’d like to share insights with you to avoid these mistakes as you work with this precious commodity each business day…
Ever try to navigate a trip in your car looking solely into your rear view mirror?
That’s what it’s like trying to make important cash flow decisions using just your online bank balance.
Granted, the online bank balance is a decent indicator of things at a certain moment.
Unfortunately, it does not provide you any visibility into:
It’s essential to have a system that ties together not only where you are, but where things project to be over the coming weeks.
Quick… Are you able to click a button for a report that provides a tally of the open bills and payments you have coming due?
Ah…. The order shipped and the invoice is out the door.
Nothing more to worry about, right?
Every dollar sitting in your open and unpaid customer invoices is a dollar that is not in your business bank account!
That’s why it’s essential to have a system in place to track and follow-up with those customers who have not yet paid you.
Navigate to the Accounts Receivable report in QuickBooks. Here you’ll find a wealth of information to help you manage the “money in” side of your business. Personally, I like the Open Invoices report the best!
From there, develop a system to contact those customers with payments due soon (all ok with the invoice you sent them?) or those who have slipped behind (when might they be paying you?)
Nailing the management of your open invoices is a key to your success when it comes to managing and planning your business cash flow.
Try this trick…
Grab some play money and walk around your shop floor. Start taping bills to the shelves to represent the value of the inventory stored there.
You’ll be amazed at how quickly this visual aid will show how much of your vital company cash is sitting on the shelf.
Even worse, as you’re moving from shelf to shelf, you may find yourself staring at a bunch of dust bunnies! An excellent indicator that inventory has been sitting around too long.
Every dollar sitting in your inventory is a dollar that cannot be used for other business needs. Just like the open customer invoices mentioned above.
Your inventory management system can easily provide you with a report that shows the quantity on hand and the total value of your inventory. Take advantage of that report to determine where you’re overstocked, and then put a plan in place to convert the stock to cash! You’ll be glad you did.
Does this describe your current “cash flow planning” system?
It’s time to automate this process…
And that is exactly where CashFlowTool shines!
No more messing with re-typing data from various reports.
No more prayers that you didn’t mess up a formula.
CashFlowTool ties into QuickBooks (all versions) and seamlessly pulls together your bank information, incoming money (accounts receivable), and outgoing funds (accounts payable).