EPISODE A4.004 Create Tracking Report on Cash Flow Management

3/8/2020

Introduction
Good day and hope you are looking forward to a productive week.
This week we are announcing our new community - The Community of Commerce for all insiders. Everyone who has JOINED US and become an inside we are moving off of the weebly web platform to a community site on Tribe.

This will provide an opportunity to share information, ask questions, and gain support for starting, growing, or exiting your business.

It is our version of the Chamber of Commerce - what it could have been instead of what it has become. This community has one goal - your success as a business owner to build generational wealth for your family. That growth will create more and better jobs in your local community.

It is a stand alone (outside the control of the arbitrary large providers) platform that provides entrepreneurs and business owners a space for the free and open exchange of ideas.

As a member of IBGR's Community of Commerce you can:

Follow other users including the OnAir Talent and Executive Team at the station.
Ask and answer questions about starting, growing, and exiting the business from our OnAir team and each other.
Follow any member of the Community to stay abreast of their latest business insights as well as building your own following.
Start discussions to stimulate input from other members of the Community.
Create and vote in Community polls.
Post and comment on posts and blogs.
Access and share content entrepreneurs and business owners can use.

We built this beyond the reach of the 'masters of the universe' so you can speak your mind.

On a closing note, if you want to know what drives everything we do - checkout this article: usatoday.com/story/tech/2020/07/23/yelp-says-half-restaurants-brought-down-covid-19-wont-reopen/5492283002/

And that is just restaurants - what about everybody else?
Have a great business week.

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Show Objectives
Got your big girl or big boy pants on? Today's show will determine whether the business survives the rapid growth of Stage IV. This is a real skill set to be mastered and the following is what we have done and consulted others to do.

Key Issues - Owner/Manager perspective:

Identify all the sources of cash (what is coming in),
Identify all of the demands on cash (what is going out),
Build a spreadsheet that indicates periods of negative velocity.

What You Need to Know
Money In
Cash Received

Paid Cash Sales
Paid Accounts Receivable
Bank Interest
Refunds & Rebates
Dividends
Loans
Inventory Sales
Other Income

Money Out
Cash Paid Out

Materials
Labor
Servicing Debt
New Financing
Leases
Mortgages
Travel & Per Diem
Other Expenses

Cash and Credit Available

Cash on Hand
Available Credit

What You Need to Do
Even though your accounting software can provide this information, I recommend you build your own spreadsheet at first. Create your own formulas and relationships, play your own version of "what if". The reason? You will understand the concept of Velocity of Cash IN and OUT at a level not possible from reading a report. Once you understand it at this level getting the software give you a report is fine.

Create a spreadsheet that covers all of the elements of cash in and cash out.
Using historical data for variable and constant (fixed) items, project the numbers over the next 3 months or longer - we match the sales cycle at a minimum.
Place close attention to those months when cash out exceeds cash in and especially when it cleans out all of your cash used for operations (Cash on Hand or COH).
If you didn't understand why a Line of Credit was essential - now you will.
Shift your Executive behavior at either delaying cash out to a better period or increasing the cash in to balance the equation.

Since we are at Stage IV there is a good chance you have a CFO working with you and use their counsel on how to make this work.

Shows