Cash flow problems can drive the demise or progress of a business but you appreciate the validity of the phrase “cash is king.” Use the checklist below to ensure you implement and maintain an accurate model.
- Plan for change
Cash flow models tell you what will happen when you gain or lose orders. Have Plan B ready.
- Forecast sales
Even if sales change week to week, forecasting will help keep a realistic tally of your expectations.
- Forecast collections
Know who pays you and when. Call them when they disappoint you. Don’t wait!
- Be suspicious of inventory (manufacturing) or capacity (service business)
Both look pretty on paper, but they eat cash.
- Schedule bill payments
Don’t react to bills. If you see a cash flow issue forecasted in a month, ask the vendor for flexibility. They’ll usually accept your request and offer leniency on future issues.
- Plan for bills
Don’t get caught with a “gotcha” bill. Looking forward a few months will remind you about the big, infrequent bills you need to plan for.
- Write down your cash flow assumptions
Examine the ridiculous ideas in your managerial head. Review them for common sense.
- Review the cash flow model with others
Pick a trusted advisor, your spouse, or even the family pet. Just say it out loud.
- Don’t hide!
If your cash flow model is forecasting bad news, turn to Plan B and start moving.
|Take control of your cash flow challenges once and for all.
Call us at (312) 656-9750 for more information on Cash Flow Launcher.