Archive for cashMAX Forecaster

New Year, new cash flow

Walking or running legs in forest, adventure and exercisingMost small businesses relish the year ahead thinking about how to change things for the better. But back in the office instead of on the beach, or checking the accounts payable rather than the cricket scores, new year resolutions might seem like impossible delusions.


This doesn’t have to be the case.

Here are my tips to ensure that you keep striding out towards your goals and 2015 doesn’t become the year of the cash flow woes.


1. Smooth out the season

If you’re currently riding high in bonanza territory, don’t see it as a one-off.

Stash some cash for those moments when your business is more lonesome cowboy than John Wayne.

If you’re in a financial hole, pole vault out of it and leap to put in place a January resolution to boost cash assets to get a jump on the year.

2. Push for upfront payments

Map when your clients might take a little longer than usual to pay.

Overdue invoice? Late delivery?


A quick phone call can often resolve things more quickly and effectively. Leave the streaming to Netflix, not endless emails.


Asking for accounts to be fully or partly settled in advance can also help identify problem payers as well as uncover the Accounts Champions of 2015.

 3. Think “Christmas” all year round

Growing your customer base is a sure-fire way of improving immediate profits and long-term viability.

Some proprietors see their business an extension of their personality. This means they might be providing a service or product that meets only their needs.


It’s not really possible to understand what you can give until you can see your business from your customers’ point of view.


Think of three typical clients: who are they, where do they live and work?

What interests and motivates them? And that card to go with the gift, how might you personalise the message to each of them?

4. The only stuff that’s secret is what you haven’t yet found out

Want to know even more about your customers? Ask them.

Want to know even more about your competitors? It may seem ridiculously simple, but Google them. There’s often no need to guess what the competition is up to. It’s usually online for all to see.

And if you’re feeling truly inquisitive, find some squirrelly way of soliciting how your customers feel about your competitors.

5. Are all systems GO!?

It can be tempting to begin the new year assuming everything is in place and set to go … after all, it all worked ok last year, didn’t it?

  • With more knowledge about your clients and competitors, do a systems check: What new skills do you need?
  • Is there a need for a faster, more secure website with live chat or better in-store or over-the-phone customer service?
  • Would your product descriptions make sense to someone who has never heard of you?
  • Is there a staff member who has an interest in a more financially-viable role?
  • Are you still relying on faxes when new software can do the job?
  • When did you last update your accountancy software?
  • Sometimes smaller short-term investments can lead bigger long-term gains.

6. Sweat the small stuff

A small increase in the profit margin of each and every sale – combined with more customers and stronger positioning against competitors – can significantly boost cash flow.

Small efficiencies can also do much for the bottom line. While it might not be thought fashionable to sweat the small stuff, it’s the little things that keep customers coming back for more and an eye for detail the keeps cash flow in control.

7. Cut costs

You don’t have to go the full Scrooge to cut costs. After all, shrinking a business isn’t the best way to guarantee an effective cash flow.

Only give the gifts that count; look at the expenses that generate the results. If there’s spending that’s not going anywhere, stop it before you too wind up at a dead end.


Resolve: If it’s not generating income, don’t spend it.


8. Sort your suppliers

Have a clean out and review old agreements.

Use the new year to renegotiate better terms and conditions, cheaper fees or added value from suppliers.

9. Embrace chaos

Monitor the market and see what others are offering.

Shop around and take advantage of any volatility that could see a good return or an opportunity to dispose of seemingly unsaleable stock.

10. Credit only where credit is due

Some SMEs survive on a boom and bust cycle. When customers want to spend up big, check their credit before celebrating.

If in doubt note the warning signs, tighten your terms and conditions or initiate a strict cash-on-delivery or EFT – electronic funds transfer – policy.

Putting the squeeze on doesn’t need to be a permanent preoccupation. July 1 provides the perfect opportunity for review.

11. Let the banks pay

Accepting credit card payments means the issuing financial institution, rather than your business, carries the risk.

So this year why not take advantage of the bank’s generosity and let them give the gift of an interest-free period?

12. Tax and Super don’t go on holidays

It can be easy to overlook setting aside extra cash for to cover regular outgoings during the year’s financial fluctuations.

Payroll tax and superannuation levies don’t go on holidays even though staff do. Take note of due dates, set aside adequate funds in a holding account, and don’t be tempted to use this money to compensate for a drop in cash flow.

Be aware that increased sales attract extra GST, so plan ahead.

13. Spend other people’s money, wisely

Building business based on borrowing is a well-practiced principle.

Ensure that any sudden solution adopted to stump-up a slump doesn’t become a long-term liability.

Carefully consider the borrowing terms. Unless needing backing for major, long-term capital investment, short-term options such as an overdraft or credit card payment might be enough to tide your business over.

If family or friends are part of your cash flow rescue plan, ensure their agreement well before a loan is needed. Professionalism remains essential. Prepare a written agreement that details all terms and conditions and have it signed by all parties, well before breaking out the bubbles to celebrate.

14. Don’t let it rain on your parade

Having a respectable, additional cash reserve in a separate, high interest bearing account could mean that every financial cloud literally has a silver lining.

15. Keep it real

Financial reports need to clearly and accurately detail the basics: what funds are available today, what is tied up, and what is owed.

Our clients use tools like CashMAX Forecaster to help them manage and monitor their business activity in real time.

If you haven’t already done so, make a New Year’s resolution to keep financial reporting real, and monitor your cash flow daily for many happy returns throughout 2015.


++ This article was published in Ninemsn Finance and Inside Small Business .


New tool takes the pain out of planning and managing cash flow

Kochie’s Business Builders has hit the streets with the CashMAX Forecaster story. CashMAX  aims to stop business owners burying their heads in the sand when it comes to cash flow.

The tool covers forecasts for specific areas like loans, sales, labour, expenses and stock and compares them to actual results.

David, the tool’s creator, accountant and CEO ROCG Asia Pacific says “spreadsheets tend to break easily and don’t cut it anymore. We found a lot of small businesses give the paperwork to their accountant and sit there, then get a plan back, without being aware of what’s going on. This tool breaks it down into dynamics that work for that business.”  To read the full story visit Kochie’s Business Builders.




The Geometry of running a business

Round, like a circle in a spiral

Like a wheel within a wheel

Never ending or beginning

On an ever spinning reel

Driving down the coast road this week I heard a song from the soundtrack from the Thomas Crown Affair 1999, Windmills of Your Mind.  The lyrics made me think about circles and squares and the issues we face as business owners and employers.  Yes, a little bit cryptic I agree, but it was a long drive at the finish of an interesting but demanding work assignment, so bear with me while I explain.

Business decisions are only made when we reach a choice and determine a path of action.  In making business decisions there are many many variables.  These variables include issues such as:

  • What is the decision going to do to my cash?
  • How is the decision going to affect my profit?
  • Is this the right time to make the decision?
  • Is this going to be the right decision both for me as well as for my business?
  • What is the likely impact of the current economic uncertainty on the business environment I operate in?
  • How much will this decision cost me now as compared with my expected future returns?
  • Is the decision going to help me progress towards my goal – today and/or in the future?
  • What if the decision fails to deliver the planned outcomes?
  • What if my partner or employees don’t agree with the decision?

And the list goes on and on. And on!

The risk so often is that we end up in a loop – a circle of endless discussions that lead to indecisiveness and results in no decision being made at all. A wily business entrepreneur I know declares that even a bad decision is better than no decision at all.  There is a modicum of truth in that to be sure. But these days there are some useful strategy and decision making tools available that can help you get out of that ground hog day cycle and move forward.

A good business strategy and decision making tool should help you:

Run optional scenarios to test and determine if the proposed action is going to provide the outcome you want.
You should be using your strategy tools to develop options, extrapolate the potential outcomes and discuss the options until you are comfortable with the decision. Then you can take action and implement.

Allow you to focus on the impact of the decision.
What is the $ effect?  How and when is it going to make a difference?  If it becomes clear that it is not for another two years and doesn’t require further immediate thought, you can put it aside and concentrate on those parts of your plan and strategies that are important to making a difference today.

Provide a structured and directed way to review and discuss your plans and decisions.
As a business advisor an activity that takes up much of my time is simply talking through decisions with my clients, most often because they are too close to the situation to evaluate it.

These days the tool I most often use is CashMAX Forecaster™.  It allows my clients to work through their decisions with minimal outside help.  Just quietly my clients love the added benefit of being able to produce a report that is professional enough to present to banks and JV partners-a huge cost saving.

Which brings me to another geometric shape – the square.  Often while you are running around in ever decreasing circles you also end up trapped thinking inside the square.  You stifle the lateral thinking that allows you to generate other possible scenarios until such time as you happen to talk to someone else about it, and they ask you questions that push you to reconsider or get to the root of the matter.

This can apply not just to you as a business entrepreneur and owner but also to day-to-day matters that your employees face.  I don’t know how often I have seen time evaporate because people are stuck on an issue or problem that could be answered if they simply asked for a second person to look at it.  Even more remarkably, the answer will often come from them – they just need someone to drag them back from focusing on the details and the process, rather than the outcome they are trying to achieve.

If you find yourself in an issue which has you going in circles, and desperate to think outside the square, pick up the phone and talk to someone.

If you need a tool that will help you understand the impact of a decision on your business, cashflows, profit and future, then call me and ask to get access to CashMAX.

You can walk around in circles forever, or escape through the revolving door to map your own future now.