Cash is King. Whoever coined this phrase must have owned and operated a business for some period of their life. Cash flow is critical to the short and long-term viability of any company. If cash flow is managed well, then the company will thrive. If not, it will struggle to survive. As the CFO for our clients, we help our clients maximize their cash flow through correctly managing their working, correctly projecting cash flow, and obtaining access to the financing required to accomplish the objectives of the firm and its owners.
Every business should have a month-by-month projection of their cash flow for the next two years and a year-by-year projection for at least the next five years. These projections are part of the overall financial model and business plan of the firm. The benefit of this model is to allow owners of the business to input the variables surrounding strategic decisions to see the ultimate effect the decisions will have on cash flow.