Breaking Down Cash Flow Management: One on One With Jonathan Bill

As some of you may know, SBS Accounting & Advisors launched their new advisory services division, with cash flow management as one of the most exciting and important components for small business owners. We caught up with SBS’ founder, Jonathan Bill, to see what cash flow management is all about and how they can help small businesses.

Q: What is cash flow management?

Jonathan: Cash flow management is where we help clients forecast their cash position for up to six months to avoid shortages and build reserves.

Q: Why is cash flow important for small business owners?

Jonathan: Cash is the lifeblood of a small business. Your business can be adding clients and even be turning a profit, but if you don’t have enough cash to pay your bills and employees, you can get into trouble fast. Properly managing your cash flow is essential not only for avoiding a crisis, but also having the information you need to proactively grow your business and make wise financial decisions.

Q: What are some of the biggest cash flow mistakes you see small business owners make, and what solutions can SBS Accounting & Advisors provide?

Jonathan: The first mistake we see is small business owners making financial decisions based upon their online banking balance. This is so dangerous because it doesn’t take into consideration any outstanding checks or pending payments. It also doesn’t take into consideration upcoming expenses for which that cash may be needed. The second mistake we see is small business owners confusing profit with cash. They look at their P&L for the prior month or prior year and think that the profit they see should be in the bank. What they fail to understand is that there are other factors to consider such as capital purchases and prior-period payables and receivables, which impact cash separate from profit.

Q: I see that you have already implemented cash flow management into some of your clients’ businesses. Can you describe what that was like, and the specific results you all achieved?

Jonathan: It is still early on, but we are excited about the clarity and insights we can provide clients into their cash flow. Not only do clients get a rolling six-month cash forecast, but they also get a color-coded heat map that shows them the exact point when there’s an anticipated shortfall. In our meetings with the client, we talk about what to do if there is a projected shortfall, and proactively help clients build reserves. We also run “what-if” scenarios to understand the cash impact of business decisions.

Q: Cash flow management is part of your new advisory services division. What other advisory services can your customers look forward to, and how can each benefit their businesses?

Jonathan: We help clients with learning how to read and understand their business financials (financial fluency). We also help them through key performance indicator (KPI) tracking and reporting that focuses on the right numbers. Lastly, we help clients by meeting with them on a regular basis to review their numbers and discuss opportunities for growth.

Ready for Cash Flow Management? Check Out Our Special Offer

In light of COVID-19 and the challenges everyone is facing this year, we’ve put together a special discount on cash flow management. Sign up by Nov. 15 to take advantage of our 2021 cash flow management services, and enjoy two months for free! Don’t hesitate to contact us today with any questions, or to sign up for cash flow management and take your business to the next level.

Rinse and Repeat: Taking Car Washes to the Next Level

“SBS has allowed us to focus on providing superior service to our customers, while payables, payroll and more are being attended to without worry. The personal attention, accessibility and timeliness of services that SBS provides are invaluable to our confidence in the operation of our business. I have, and will continue to recommend SBS.” – David Danhof, principal owner of Car-Nutz Car Wash, in Acworth, Ga.

For many car wash owners, 2020 has been the most challenging year to date. Some have shut down, been forced to cut back, or just now starting to reopen and refuel their businesses. While no one could have braced for this unprecedented COVID-19, there are tools and strategies car washes can put in place to survive, and even thrive, through the harshest of pandemics and natural disasters. That’s where we come in at SBS Accounting & Advisors.

For more than a decade, our SBS team has helped car wash owners and operators transform their businesses through powerful solutions that meet their everyday needs. We come up with actionable plans to solve your biggest pain points, such as high costs and overhead, as well as the need to increase your bottom line. We also clean up your books, provide regular accounting and reporting, and even handle payroll. This gives you peace of mind knowing that your back-office bookkeeping and accounting is taken care of, freeing you of the day-to-day stress and allowing you to focus on what you do best: washing cars, being there for your customers and running your business.

You may be thinking that all this sounds good, but also wondering what SBS brings to your business and what we can specifically do for you. To answer these questions, the video below gives a glimpse, but the rest of the article highlights why SBS can take your car wash to the next level.

 

Key Performance Indicators (KPIs)

As car wash owners and operators, you’re often so consumed with the daily grind that you simply don’t have the time to focus on growing your business, or perhaps don’t even think about it. At SBS, we find that many car washes aren’t being given the key information they need on a regular basis to make wise, impactful business decisions. This doesn’t just hold you back from your true potential; it also puts your car wash’s future in jeopardy.

Our team strives to go the extra mile, finding all the important information and data we can to help you grow your business and reach your goals. This all starts with KPIs.

With KPIs, we not only can see how your business is running and what aspects need to be fixed or changed, but also find specific data that helps us deliver powerful solutions to business growth. Just the same as your customers driving away with a clean windshield, KPI reporting provides a vision of the key drivers that decide your company’s success, enabling us to track the key metrics that determine the goals you are trying to reach.

You may be wondering what key metrics we track for car washes. One thing we track is the number of cars washed each month (non-financial data), and then divide total wash revenue per month (financial data) by the number of cars. This blending of financial and non-financial data leads to key information. In determining dollars per car, you’re able to see trends and discover how much you need to upsell to customers to make up for any missed revenue, including premium services and club memberships, for example. Another key metric we track is the number of rainy days in a month, which can be devastating to a car wash business. We then compare those month-to-month and help you plan accordingly.

The metrics above highlight leading-indicator KPIs, but what about lagging-indicator KPIs? One of those is gross profit percentage, which aims to see how much you’re truly making on the work you do. We are able to break down how efficient your company is at delivering its services, tracking by client, job, team, location, and many other areas to determine your strengths and weakness and deliver transparent results.

Other KPIs we track for our clients include client retention rate and employee turnover rate. Getting new customers is always important, but keeping those customers happy for the long run is crucial to long-term growth. This means your staff must be invested and devoted to going the extra mile to please the customer, and represent your cash wash and your brand. In addition, if you’re seeing frequent turnover in your staff, SBS can find out why and come up with strategies to solve this problem.

Cash Flow and Advisory Services 

Another area we are passionate about is cash flow – a must for car wash owners. You’re probably very familiar with high overhead costs and lack of cash on hand that weigh you down. SBS aims to make these difficult realities a thing of the past.

Business owners often believe what’s in their bank is what’s available to spend. This misconception can really hurt you! In reality, you must know your actual cash balance, which includes upcoming payable and receivables. Our SBS team will see where your business stands and turn your data into powerful growth through real solutions.

One of those solutions lies in our new advisory services division, which you can learn more about here. A big part of our advisory services is cash flow management, which allows us to determine your shortfalls – and strategically plan to prevent them. Over time, we can build your cash reserves through the KPI strategy mentioned above, as well as projections and budgeting.

This is just one of the advisory services we offer at SBS. But, the bottom line is that if you neglect cash flow or don’t understand it, the trajectory of your car wash can plummet. That’s because simple, yet common cash flow mistakes can cripple your business. Don’t worry – we’re here to help. Don’t hesitate to reach out to us with any questions.

Getting the Right Plan for You

At SBS, we have three different plans, custom-tailored to fit your budget: The Basics, The Essentials and The Works. Our services are also completely scalable, so as you expand your services, locations or even create franchise opportunities, you can grow without missing a beat. We can manage your bills and receipts, enter and manage your payroll, maintain your books, and provide monthly reporting, while always keeping your data safe and secure.

To see exactly what these three plans encompass, click here. And, if you have any questions, or want to schedule your free evaluation and demo today, don’t hesitate to contact us. You’ll be on your way to less stress and bigger results, while withstanding life’s biggest surprises and challenges.