Blaine Bertsch with Dryrun, discusses the frequency in which a business needs to forecast their finances and how important it is to have a pro at the helm.
This is Blaine with Dryrun and today I wanted to cover just a question that I’ve heard a number of business owners ask me and actually I’ve heard the same sort of comment coming from sometimes from the advisor side.
And that’s how often or what frequency I guess, should a business be looking at their cash flow, sales pipeline, growth scenarios.
How often should they be looking at their financial projections to know where they are headed.
Now often when we ask them we find out they are doing it with much less frequency then they should be often by a long-shot.
So if your business is over a million in revenue a year and especially if you are in the 5 to 10 million revenue a year, you need to be looking at this, someone has to be looking at it absolute minimum weekly of course.
Like you need to be on top of those things.
If you are an advisor and you are actually advising these companies and helping them understand where they sit in their cash flow.
In particular, again, weekly, minimum. Make sure that their records are reconciled, you are peeking in on those things weekly and figuring out where you are at.
You know businesses that are really struggled with volatile cash flow from overdue receivables, big payables that they have to make sure that they’re making. They’ve got big payrolls every two weeks. A big tax bill, whatever that is make sure you’re on top of it regular.
Sales pipeline as well, not just at what stage are those sales in. Talking and moving along the sales themselves. But make sure you are actually looking at the forecast weekly so that you know that you have money coming in.
That those sales are going to close and you are going to generate enough revenue for your company. But also so that you can begin to negotiate those start dates and manage those deals when you actually close them.
So again it is the same thing, make sure you are on top of those forecasts when those deals will close, when they have to be delivered, when it’s going to turn into money for your business.
So for businesses, for advisers when they are advising businesses, CFO’s and CPA’s that are advising their clients, weekly is where it’s at. Make sure you are on top of this week. Someone is at least peeking in and seeing where you are at...it doesn’t have to necessarily take a lot of time.
But monthly is not enough. Quarterly is you are driving blind, and if you are waiting until end of year and just looking at past reports and taxes you are just at a really high risk.
So I highly recommend get it into your processes, make sure someone is on top of it weekly with a business that size, likely have a pro involved rather than the owner, have either a contractor, fractional CFO someone from like a CPA that is helping you along or even someone obviously internal in your company a CFO, have somebody dedicated to staying on top of your finances week to week.
Thanks for watching, feel free to hit me up if you have any questions, want to chat and comment on the video.
You can hit me up on chat on our website on dryrun.com
If you are looking for a tool to help you advise your clients or a business or you are a finance person inside a business and you want something that is going to help you build those forecasts, build your cash flow, revenue and sales forecasts and growth forecasts.
Talk to your board, talk to your C-Suite make sure that everyone’s on the same page, Dryrun might be a really good fit for you.
Please check us out at dryrun.com thanks so much.