Are you ready to stop the madness

and start controlling your business?

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Many business owners find difficulty coming to terms with their financial obligations. They

will dedicate long hours combing through their company’s expenses, invoices and

payroll to arrive at an annual budget, only to let the report sit until it’s time to repeat the

exercise again a year later.

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Change the way you look at your company’s finances and

get your company back on the right track.

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1. Know how much cash you have on hand.

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1. Know how much cash you have on

hand.We’re talking about tangible cash here; and to know how much you actually have on hand you will have to look beyond the ending balance on

your business’s bank statement while not letting yourself get caught up in a sea of

technical information, graphs and presentations.

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1. Know how much cash you have on

hand.The three most important questions you should be asking every week are:• How much money do we have in the bank?• What is our accounts receivable balance?• Who do we owe and how much we owe them?

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2. Understand your billing practices.

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2. Understand your billing practices.

To get an accurate picture of your company’s cash flow, you will need to take a closer look at your current billing practices to find out if you are getting your bills out on a timely basis.

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2. Understand your billing practices.

It may surprise you to learn that a lot of decision-makers and business owners think

they are on top of their billing activity, only to

learn that they’re not. A 13-week cash flow budget will expose this weakness and will

get you back on track.www.reacpa.com

3. Delegate ownership of your cash flow.

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3. Delegate ownership of your cash flow.We are all busy and it’s easy to be

enthusiastic about implementing a 13-week cash flow strategy — in theory. But when it’s time to actually put your strategy into action it’s easy to blame “lack of time” for why you

put it off. The good news is that you can delegate the work to someone who has the

time.www.reacpa.com

3. Delegate ownership of your cash flow.

 You really can’t afford to ignore your cash flow. When you understand where your money is coming in from and where it’s

going, you will begin to see positive results.

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4. Review your cash flow projection often.

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4. Review your cash flow projection often.

While it’s great to write out an annual budget or a three-year-projection, most

owners will push the document to the side … where it will begin to

gather dust. When the day comes when you need

to know the financial state of your company for decision-making purposes, you are left

with inaccurate, outdated information.www.reacpa.com

4. Review your cash flow projection often.

After following through with a 13-week cash flow for nearly a year, you will gain

greater insight into how to spend your business profits to help generate the additional cash and sales needed to

facilitate sustained growth.

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5. Put your accrual basis profit in its place.

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5. Put your accrual basis profit in its place.While you may still need to have an accrual statement or generally accepted accounting principle statement to appease regulatory agencies, you would do well to remember that when it comes to the lifeblood of your

business, cash flow is king.www.reacpa.com

5. Put your accrual basis profit in its place.

In all likelihood, businesses of all sizes should consider keeping two sets of records — an accrual and a cash basis statement —

to maintain your company’s compliance among all stakeholders.

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5. Put your accrual basis profit in its place.You can’t spend accrual basis profit. You can, however, spend cash basis profit. Which is why, at the end of the day, you’ll find that

your banker, your lender, your shareholders, etc. … will take more interest in your cash flow strategy and your cash flow budget

than your other reports.www.reacpa.com

Click here to listen to “Why $1 million Doesn’t Matter,” on unsuitable on Rea Radio.

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Questions?Email Rea & Associates

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