4 easy steps to managing your cash flow like a champ!

4 easy steps to managing your cash flow like a champ!

Managing cash flow can be one of the most challenging aspects of running a small business. Controller onDemand recently started working with a small business who was struggling immensely with this task. On most occasions they could not meet payroll and had to delay it a few days or even up to a week. COD came to the rescue. After instituting a cash flow management plan immediately their payroll has been paid on time, every time.


“Never take your eyes off the cash flow because it is the lifeblood of your business” — Richard Branson.


Here are 4 easy steps to managing cash flow.

  1. Pay your bills one day per week. Look at what is due and pay accordingly based on what your cash allows you to pay. Containing bill payment to 1 day per week lets you look at the whole picture objectively and see what is most important.
  2. Open a line of credit. If you have payroll you should have a line of credit. I recommend that any business who has payroll has a line of credit as a backup. One thing you must always pay is your payroll. You cannot miss payroll.
  3. Keep some cash in reserves. If you do not have a line of credit as a backup to cover your payroll demands, make sure you keep some cash in reserves after paying your bills to be able to meet your following week payroll demands.
  4. Look at your receivables. Can you nudge anyone who is past due to pay their outstanding invoice? Gentle reminders and/or statements can sometimes bring in more cash. Also review customer paying habits to predict what checks/payments will arrive next week.

Or let Controller onDemand create a cash flow plan for your company.

Do you know your business’ financial story?

Do you know your business’ financial story?

Believe it or not, many owners do not know their financial story. Often they depend on their bank account balance as their only means of determining where their business stands. This is unfortunate because so many answers to how the business is doing and where it is headed can be found in your financial story by looking at financial reports regularly. In fact, a business that looks at their financials monthly will be 80% more successful than those who only review them annually.

Let’s start with this… Do you know what segment of your business is most profitable? It may NOT be the one that brings in the most revenue. If you are not looking at your business by segment or by job and analyzing for profitability, you could be in for a surprise. Some call it job costing, others call it ABC (Activity Based Costing). Whatever you call it, it TELLS YOUR STORY. If you are not doing it, you could be wasting thousands of dollars and/or lots of manpower on a part of your business that is not profitable.

“You are never too old to set another goal or dream a new dream” — C.S. Lewis

There are so many items you should be reviewing your financial reports to understand your business’s financial story. Is your financial story a fairy tale, comedy, drama or horror story? Or worse yet, a mystery because you are unaware of what your story is?

Take the time to figure it out. And if it’s not a fairy tale yet, contact me and let’s talk about formulating a plan to rewrite it.