If cashflow is not monitored, planned, and predicted, the business could be bleeding.
Do you have up-to-date visibility of cashflow? The sales top-line or even the profit bottom-line don’t equate to cashflow. Timing differences can make a critical difference. Do you get daily reports? Do you do rolling cash-flow projections for the next three months, to alert you to mismatches between collections and commitments? Do you know the impact on cashflow from the new business you are bidding for? Are you making emergency appeals to your bank manager, or offering customer’s deep discounts to pay you early?
Are your drawings from the business sustainable? Are your personal expenses being co-mingled with those of the business?
By preparing regular bank reconciliations, as well as monthly historical cashflow reports and rolling cashflow projections, you will enjoy a sense of confidence of being in control and able to anticipate and do contingency planning if necessary, rather than being deflected in to crisis management.