Last time we looked at some cash flow reports in BillQuick Online. It’s important to analyze cash flow. In fact I believe that cash flow is the area where you should spend the most time, of all of the time you spend analyzing reports.
After analyzing cash flows in terms of what happened, next we need to look at what WILL happen. Perhaps a better way to say it, is in terms of what we’d like to see happen. I know, I know. You’d like to see $5 million in the bank — me too. Maybe we can get there, but let’s break that down.
Assuming you want to have $1 Million in the bank to start with, then we need to make enough money to pay our bills, and then have $1 Million saved. So take your typical annual expenses, plus any debt service, planned equipment purchases, and equity distributions and add $1 Million to that. Now you have your target.
The point is that you have to have a target, and then you’ll need a plan for how to get there. This means a cash flow forecast. We looked at how to create a cash flow forecast in Google Sheets, not that long ago.
There are other things that need to be forecast, especially in order to see to it that our cash flow forecast comes out as we expect.
What is your single biggest (and most expensive) resource?
So, we probably want to spend some time looking at labor allocation, and labor-driven revenue allocation reports. Bill Quick Online gives us an amazing look at this. Then we can dive into the allocation part of BillQuick Online, and move things around if we need to. This helps us maximize our efficiency. Maximum efficiency gives us the best chance of meeting, or exceeding our expectations with respect to cash flow.