Cash Flow Officer

Scott authored the phrase “Cash Flow Officer” to emphasis the generation of future positive cash flow as the pre-eminent responsibility of a CFO.  Our goal is to provide the very best in CFO services, with an emphasis on managing cash flow from operations.

You have our guarantee to generate improvements in cash flow that exceed your investment in our services, multiple times over.  You also have our commitment to maintain confidentiality, act with professionalism and to be respectful of you and your stakeholders.  As our valued client we want you to wish you had met us sooner and to be certain of the increase in business value we have created by our work together.

Cash Flow Forecasting by Week

Weekly_Cash_Flow_Iowa

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We will adapt for you a simple spreadsheet tool to track and project weekly cash receipts and disbursement commitments in the large categories such as materials, payroll, rent, debt service payments, tax payments, etc.  This will allow you to anticipate future cash balance fluctuations and to keep your creditors, financing and investment partners informed of what to expect. In The Black Ink-Co offers a free download of a Weekly Cash Flow Forecast spreadsheet.

Cash Flow Cycle Mapping

A sales order can be measured in days in the cash flow cycle.  In most businesses you must spend money in the form of labor and inventory before the customer pays you in full for services delivered.  Some businesses such as Amazon.com, collect the sales order in full prior to paying for the inventory to be shipped.  In either case, it is important to know how many days in the cash cycle are dedicated to receivables, inventory, payables and customer deposits.  We will map this for you both on a timeline and in a simple table of days in the cash flow cycle.

Cash Flow Improvement Quick Wins

By mapping and reporting out on your cash flow cycle, we can isolate cash fluctuations due to working capital (current assets less current liabilities on the balance sheet) vs. cash fluctuations due to volume and margins.  By computing the capacity of your organization (by business function and by key asset) we can project your sweet spot for covering fixed costs.  Then by analyzing your margins by customer type and/or by product line we can identify margin opportunities.  Once we know where the largest opportunities are, then we dig more deeply for quick wins where there is “low hanging fruit.”

sales_dollar

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Cash Flow Management Training

In addition to gaining knowledge yourself on the operating cash flow of your business, it is critical that your key employees understand the cash flow implications of their respective roles.  It takes just a few examples per employee function, to explain how they impact the cash flow of the company everyday.
It is impactful once they realize how few cents of every sales dollar are retained by the owners of the company once they pay the cost of goods, operating expenses, taxes, debt service and capital improvements.  This will help them to realize the importance of saving every penny! In The Black Ink-Co offers a free download to show the breakdown of a sales dollar spreadsheet.

Cash Flow Metrics and Reporting

As the owner and CEO of the business, you expect your accounting department to provide timely reporting of the financial metrics to the leaders in the company, for those items they control or influence.  Our emphasis will be on the cash flow metrics.  For example, do your sales people know their average DSO (Days Sales Outstanding) or simply the number of days it takes to collect what their customers owe for services already delivered?  Can your operations people tell you how many days average inventory has been held?  Are your credit application policies documented and enforced so that you are collecting customer deposits in advance where necessary?  What are returns and allowances doing to your collection efforts?  How about delays in completing service backlog for customers who are withholding final payments?  Do your schedulers and service people comprehend the effect they have on your cash flow cycle?  These are just a few examples of how you can make the cash flow cycle visible to those whose hands touch each order.

Financial Modeling and Projections

Whether you are a start-up company or are seeking additional financing, you will need a business plan.  Sometimes the hardest part of writing a plan is to know where to start, what is expected and how to develop the financial projections.  We will help you with all of the above.  If you prefer, we will draft your business plan for you during a series of interviews.  Then we will adapt financial models to your situation and your company.  Together we can complete a first draft of a business plan in just weeks.