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.