Ever looked at your profitable income statement and wondered why there isn’t that much money in your bank account? You’re not alone – and many a profitable business has struggled to survive because they couldn’t manage cash well.
One step is to have a budget and cash flow projection tool.
If your strength is not the reconciliation of balance sheets and P&Ls to bank statements, and sometimes it feels like your accountant and controller are speaking a foreign language, it can feel as if one of your most important assets is hovering just out of your control.
Many of my clients have found this simple (not easy!) spreadsheet to be a way to get their arms around the details of their cash flow. The process of understanding it gives them sometimes shocking insights into how their business works and how the money is managed.
For Robert, a financial manager with excellent financial skills, it was a revelation.
“Maybe it took someone who’s not a professional numbers person to get simple enough to help us get the big picture – but this is incredible. For the first time (it’s embarrassing to admit) I have a long term view of how the cash in my business flows.”
Now he’s expanding through acquisition and hiring with great confidence because he has a tool that pulls together all the intricacies of expanding income, payroll costs, equipment purchases and bonuses.
As an EOS® Implementer it’s my job to help my client’s identify the holes in their buckets and help them fill it. My cash flow projection tool came out of my frustration for clients who couldn’t get the information they needed to figure out the impact of their decisions on their cash. It has had such an impact on every client I’ve given it to that I wanted to share.
Here’s a picture of it:
A pretty standard P&L budget. The magic is in the cash adjustments at the bottom, and the formulas. This allows leaders to look out a year, and to play “what if” with market, hiring and purchase decisions.
If you want the spreadsheet with the formulas and simple instructions for using it, click here.
Helping good business people get control of their business is my passion. That’s how my clients can live the lives they dreamed of when they took the risk of entrepreneurship!
Lynda
P.S. I’m a big fan of a folk singer named Odetta. Here’s the video of her singing at Carnegie Hall with Harry Belafonte. The song? “There’s a Hole in the Bucket!”
It made me laugh – haven’t we all had conversations like this in our business life? No time to watch the video, read the lyrics. You’ll get the idea. But seriously, who can pass up such great singers having such fun?
