Survive Tough Times with Cash Flow Planning

You don't have to take my word for it that cash flow planning helps businesses through tough economical times. The Vancouver Sun says that cash flow planning is key especially during difficult times.

When your business needs financing, go for it. Don't let the economy stop you. We've had clients who came to us for financing in the worst of times and they would've never grown without our help.

When we went to Colorado to meet clients and hold seminars, we heard great stories. One client was almost in tears. She said she used to spend four days a week trying to collect payment from her clients. Now she only spends two hours a week doing that. Furthermore, she now offers a health package to her employers.

At first, her banker and CPA didn't support her efforts to get financing from us. That changed. In fact, her banker referred someone to us. Stories like this drive us to work harder to help people.

What changed for this particular client? Her cash flow is in better shape and she has it under control. Obtaining financing is not a weakness. Many businesses request financing so they can expand. It could be to add more employees, add another building, buy equipment, and hire more employees.

In the article, Denise Wright-Ianni, principal with CGA Professional Corp. says, "When it comes to cash flow, don't leave anything to chance. Once you've had a good quarter or year end, go to the bank and get as much credit as you can, even if you don't need it. Then you have it in place when you do."

So basic advice for better cash flow management:

• Track your cash flow... always. Search for tools that help with cash flow management.
• Know your business' cash requirements.
• Forecast cash flow to ensure positive cash flow.
• Avoid emergencies. But if confronted with an emergency, look for financial organizations as some can provide cash within a week (we do).
• Review discretionary spending.
• Monitor accounts payable and accounts receivables especially aged accounts receivables.

Banks aren't always the right place to go for financing as you saw a banker referred a client to us. Obviously, the bank wasn't able to provide a loan or line of credit based on the business' needs and collateral. Service businesses, especially, don't always have something to put up as collateral.