The Financial Intelligence Guide

Would you like to be able to easily predict your future cash flow?  And maybe even improve it?

There has been additional scrutiny over people that have taken the Paycheck Protection Program (PPP) loan in the last few weeks. It all boils down to one somewhat gray certification on the application.

Not long ago, before the quarantine, I met an interesting Uber driver in Nashville. We had a long drive to the airport, so I got to know him and ask some questions. He was from England and had spent his career turning around 12 companies all over Europe and the United States. The last company he turned around was in Nashville, and then he retired. He said that all the companies were at a point of complete collapse. They were possibly weeks away from bankruptcy.

So many businesses are in a potential cash crunch. If they aren’t in one now, they can see one coming in the next few months. The economy has come to a screeching halt. Businesses of all sizes are laying off or furloughing workers. Some companies are looking at across the board pay cuts. I have been working with clients on looking at different financial forecasts and cash flow scenarios. Now we have another new cash mechanism to consider.

Do you wait months after the end of the month to see how you are doing financially? Are you able to review financials each month consistently to prior months? Do you make decisions using your Income Statement and Balance Sheet with actual results and a forecast?

I remember as a kid, we had a whiteboard where we would write funny sayings.  We would make up stupid quotes like the ones from Jack Handy from “Saturday Night Live” in the 90s. One time my older brother wrote simply “Money Goes Away.” He realized that as he started to earn money, it went away faster than he could imagine or keep track.

Your business seems to always be in a cash crunch. You are servicing your clients well and have a good business model, but there is something wrong with the cash flow. What is happening?

In all organizations, ‘Cash is King’. I remember working at a small, young business, and there seemed to be a crucial part of the business cycle that was breaking down. We were not consistently or accurately billing the customer. I knew that we would struggle to truly grow or manage cash until we improved the Billing process.

Have you wondered what Accounting Software would be best for your business?  There are so many options to choose from. I have the most experience with using different versions of QuickBooks. Now the question is…what is better – QuickBooks Online or Desktop (Pro, Enterprise)?