Part Time FD Tips: Are You Taking Snapshots Instead Of Seeing The BIG Picture?

Part Time FD Strategy

in Cash Injection Tips

One thing that regularly amazes me is when cash flow problems catch a business owner completely unawares. They don’t see the storms brewing on the horizon.

One day it’s cash sunshine, the next the business is fighting for survival.

The sad thing is that this is normally not a one-off. Often this ‘blip’ happens month after month. Lurching from cash crisis to cash crisis is hugely demanding on a business owner’s time. It distracts focus from those areas of the business where the owner provides most contribution.

So what’s the real issue here?

The answer often is that the business owner’s focus is elsewhere.

Every business has what I call the cash stress points. These happen when large payments need to go out of the bank. The monthly payroll, VAT payments to HMRC, and the quarterly rent due to the landlord are prime examples. A monthly direct debit to a large supplier is another.

But there’s nothing surprising here. All these payments are entirely predictable. Why then, for many businesses do they cause the huge difficulties which can result in our Part Time Fds being called in to help?

What often happens is that business owners look on their cash position as a snapshot. They come up with an instant picture. At its most basic, it’s how much is in the bank that day when they log on.

If all’s well at the bank, then they get on with the “more important” stuff, finding customers, satisfying orders etc. But that’s the problem with cash. If you don’t keep on top of it, it comes back to bite you when you least expect it.

The thing is, cash flow should be managed like you’re shooting a movie, rather than taking a quick holiday snap shot!

The business owner as the film director (or in the alternative a finance director) needs to see ‘The BIG Picture’ and be in full control of the production. There’s a detailed script – dictating your cash position at all times.

What this means is that you can see what’s currently happening in your business cash story. More importantly you know what’s about to happen. You can then spot any future cash problems well in advance and take action early to head these off.

So go on…. Think of yourself as the movie director managing “The Cash Story” rather than a one-off snapshot artist!

Until next time.…


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