Making cash flow easier

Everyone who owns a business wants to make money.  This takes cash flow. Cash flow is having money flow in and out of your company at the right times in order to optimize the solvency of the business. The ultimate goal is to have the business sustain itself and grow.

Positive cash flow will help you grow

Positive cash flow will help you grow

All businesses initially rely on outside resources to start their companies – either personal capital, outside financing, outside investments or donations. This money is used to generate the products or services that will be used to create operational cash (revenues).

All businesses have expenses whether it relates to the cost of making their products/services, or to keep the business running.

Cash flow is crucial to all businesses but few businesses understand it, and even fewer implement the tools necessary to monitor and optimize cash flow.

Lack of cash flow, ironically, does not mean lack of revenue or sales.  I have worked with companies who have generated over a million dollars in gross revenues, but lack the available funds to meet payroll.  I’ve seen highly profitable companies fail because they keep borrowing outside money to funnel into their business just to keep the doors open even though they could have sustained through learning some basic cash flow practices.

There are rather complex methods available for analyzing and using Statements of Cash Flow, mostly understood by accountants and financial investors.  In my experience, unless both the concept and implementation of a financial procedure is simplified, most small businesses will not invest the time needed to comprehend, much less utilize, an unknown, even scary topic.

There are 3 steps to making your cash flow easier:

  1. Look at your numbers by having accurate, up to date bookkeeping
  2. Using those numbers to enter forecasts about what you think will happen with your sales, expense and future investments
  3. Set up a budget to help stay within your means and have positive cash flow

What’s even easier is that you only have to do the first step, because LivePlan, will do the rest.


LivePlan is an online business planning, budget, forecasting and cash flow tool that takes financial date from QuickBooks or Xero, and creates easy to read, easy to comprehend, charts so you can visually see revenue and expense breakdowns, cash flow forecasts, margins, accounts receivable data, and so much more.

Easy to choose category and period

As a small business consultant, when I first learned of LivePlan capabilities to generate easy to use cash flow tools, I immediately signed up to become one of their first 50 Expert Advisors.  Why?  Because 90% of my clients struggle with cash flow and this has been, by far, one of the best cost effective tools, I can offer to help them understand where their money is going and what they need to do to improve cash flow and ultimately grow their business.

Cash Flow


Not quite ready for LivePlan?

Here are some tips I share with my clients to improve cash flow:

  • Keep your bookkeeping up-to-date.
  • Reconcile your bank and credit card statements each month.
  • Schedule and pay bills 5 days before they are due. This will also keep your credit score in good shape.
  • For every bank deposit, start saving at least 5% (put into separate savings account) and work your way up to 20-30%. Use this money for taxes, investments and emergencies.
  • Write and implement a simple A/R management procedure to stay on top of customers that owe you money.
  • Provide customers multiple, easy ways to pay you.  For example, Intuit IPN, PayPal, prepaid envelopes, automatic credit card payments, etc.
  • Lower inventory on hand to optimal quantities through efficient order and inventory management procedures.
  • Instead of incurring more debt to increase cash flow (which ultimately hurts your cash flow by adding unnecessary finance charges, consider reducing expenses or borrowing a short term note instead.
  • It’s all about numbers – increase sales, decrease costs, reduce A/R and manage inventory – all on a schedule.
  • At the beginning of each year, anticipate investments that will be needed for additional equipment, software and employees.

Want to learn more about LivePlan?

CPA’s and Bookkeepers click here

Small Business Owners click here



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