Cash Management

The most recent session of our Business Mastery Program continued into Cash Management as part of Module 6 on Financial Management. Here is what we touched on from my notes during our session:

• “Never take your eyes off the cashflow, because it’s the lifeblood of your business.” – Richard Branson
• The difference between Cashflow and Profit
• Calculating Cash Position (i.e. How much cash you have)
• How frequently to review your Cash Flow
• What your bank account can tell you
• When Dips and Bumps are okay – and when they’re a cause for concern
• Why you can’t save your way out of a cashflow decline
• How to easily – and stupidly – bring your expenses to zero
• When to focus on managerial bookkeeping (vs. financial bookkeeping)
• What kind of financials to use for decision making
• Time period based reporting vs. snapshot in time reporting
• Understanding Cashflow reports – and how cash positions, cash inflows, cash outflows, and non-operating related cashflows are used in the calculations
• Where inventory plays into Cashflow reporting
• The Language of Business
• What “Sleep at Night” money is – and how to get it
• How the money you have isn’t dollars – but time
• How to figure out the right amount of cash balance to have in your accounts
• The differences between required balances, safety balances, and excess balance
• How to pay dividends out correctly – and what money to never touch
• How to take seasonality out of a business with regular cash builds and cash requirements
• The #1 Rule in Growth
• How to balance Expansion with Revenue
• Strategies to improve your Cash Position
• What to sell, what to pay, and what to collect
• “Rule Number 1: Cash is King” – Jack Welsh

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