Laura Day’s Top Ten List – Number 5: Cash Flow

There are some things we see over and over that are really not in your best interest.  Here’s why:

#5.       You Think  that Cash is Not Your King

Large businesses, small businesses, individuals.  One thing remains the same:  cash flow.  The majority of our clients do not have a thorough and accurate grasp on their pure cash flow analysis.  Money in, money out, and when.  I am not talking GAAP — I am talking about pure and simple cash.   So many people don’t even realize how much they may be making or losing per widget, because they don’t keep a handle on cash.

A standard in the turn-around consultant business is the 13-week revolving cash flow statement.  Even if you are not currently having problems, beginning to get your arms around a rolling cash flow budget, and the accuracy of your projections against actual, is never a bad exercise in running a business.  Even though I know it would be a good idea to have a budget to run my household, I don’t necessarily sit down and take the time to do it.  We get it.  However, unless you know how much money it takes to operate your business, you can never figure out what is available for debt service.  You absolutely must be able to get your arms around this data in a quick and accurate manner.


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