What’s the big deal about cashflow?

2 Feb

Its all about cashflow. Talk to a business ‘expert’ or management consultant, growth advisor or anyone advising a business on finances and the explanation of cashflow and its importance ranges from the simple to needlessly complex. To me, it’s simple: do you have enough cash in your bank (or mattress, if that’s how you roll) to pay next week/next period’s bills and continue servicing customers.

So, how do businesses answer this question?

In more ways than I had originally expected! I’ve spoken to hundreds of businesses of different size and sector in the US, UK, Canada, Europe, Australia, New Zealand and some emerging markets, to find out out how they manage cashflow.

Many just focus on tracking sales and expenses, check the bank and make a resolution to get better organized. Others combine paper and pen with spread sheets and increasingly, their accounting application. Accounting applications allow for cashflow analysis and budgeting, but they’re not as effective in answering the key cashflow question. Spreadsheets are still powerful for complex financial analysis and reporting. But for most businesses, they can take up a lot of time.

Apply for a loan, and a lender will probably ask for your proforma income and expense statement, balance sheet and cashflow projections. Some lenders ask for a statement of cashflows, which tracks cashflow movement, rather than monitor ability to pay bills on a particular day.

Talk to your accountant about spending to upgrade capacity to fill a new order or service new customers/markets, and you’ll end up talking about cost/benefit and cashflow impact.

If you’re fortunate enough to get paid up front by credit card, you pay a few percent for the convenience to not have to chase receivables. Sell to larger corporate buyers who take 60+ days to pay you and, yes, you have to be very mindful of cashflow!

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Profit keeps score of your business model, tracking how your revenues exceed expenses. Cashflow is what allows you to keep going. It’s your bills paid, your payroll, rent and everything that allows you to keep your customers happy. And happy, paying customers keep you in business! It’s simple, it’s obvious, and it’s critical. Businesses don’t talk about it much but it is a big deal!

 

Bilbus Cashflow Hub saves you hours managing receivables and cashflow every week. Automating invoice follow up and cash scenarios to improve cashflow predictability. Cashflow Hub integrates with Xero and QuickBooks Online while also manually importing from your favourite spreadsheet applications.

A New Years Poem 2: Small Businesses, Big Impacts

13 Jan

Bilbus Cashflow Hub helps businesses and their accountants & bookkeepers. To get our creativity rolling for 2014, we  composed 2 poems (or the closest thing to poetry we could come up with!) celebrating accounting & finance and SMEs/SMBs.

 

imageThis one’s for the small businesses everywhere that help our economies tick.

 

 

Let my orders flow

Storm, rain or snow

Our contracts fair

Procurement teams compare

No price squeeze, when big customers sneeze

Our invoices go, without fuss, cost or extra workflow

Validated quickly, verified efficiently

Keep us informed, spare us time in calls to follow

Convenient payments sent, promptly on the morrow

Early payment bests late payment, when discounts stay shallow

Treat us fair, treat us right

Don’t fake the recounts just because you can

And while we depend on and cherish your custom

Remember we’re a small cog

In the world’s chain of supply.

 

Bilbus Cashflow Hub combines receivables and cash planning to save businesses time and effort managing daily cash and receivables. Automating invoice follow up and cash scenarios to improve cashflow predictability.

A New Year’s Poem 1: My Accounting & Bookkeeping Partners

7 Jan

Bilbus Cashflow Hub helps businesses and their accountants & bookkeepers. To get our creativity rolling for 2014, we  composed 2 poems (or the closest thing to poetry we could come up with!) celebrating accounting & finance and SMEs/SMBs.

imageThis one’s for the accounting & finance team that is the glue to small business.

 

Clients find me

 

Working weekday, weekends and nights

 

Quotes I prepare, come across just right

 

With data whose chaos with order I charge

 

A value of rescue

 

Returns, accounts, visibility once hard

 

My diligence and efficiency

 

Keeps the business in flow

 

And seizing opportunities

 

My customers grow

 

I’m there on schedule, every week, fortnight or month

 

Wading through receivables, confirming balances and flows

 

Doing payroll, taxes, cashflow, many spreadsheets in tow

 

I’m migrating to the cloud while competitors take it slow

 

Perhaps I help with a business plan, or proposal for loan

 

Sometimes a partner, sometimes the owner of workflow

 

Bringing life to the detail

 

Vital to the business, I keep clients in the know

 

Bilbus Cashflow Hub combines receivables and cash planning to save businesses time and effort managing daily cash and receivables. Automating invoice follow up and cash scenarios to improve cashflow predictability.