So it’s OK for me to pick on the CPA community a bit. The accounting and CPA community has done a poor job of helping business owners and entrepreneurs understand and manage the cash flow of their business.
It’s easy for them to get overly focused on just looking at their product as a set of financial statements or a tax return and pass up the opportunity to help you really understand and benefit from the story behind the numbers. To provide you some real insight you can use to make your business stronger and grow it with confidence.
Oftentimes you’re not getting what you need in a way that is simple and easy-to-understand.
Taking Control is About Answering Two Questions
Everyone growing a business is facing some of the same challenges. The reason so many people don’t really know what’s going on with their cash flow is because they have no good way to create visibility and transparency around all the different drivers of cash flow.
There is a great quote I put in my book Never Run Out of Cash that says, “It is a simple matter to make things complex, but a complex matter to make things simple”.
Taking control of your cash flow really boils down to being able to answer two very simple questions.
I’ve done the hard work to narrow cash flow management down to the two critical cash flow questions. Because when you have the answers, you instantly free yourself from that nagging worry and concern floating around in your head when you know you’re flying by the seat of your pants.
Here they are:
- What is my cash balance right now?
- What do I expect my cash balance to be six months from now.
Ask yourself these two questions right now to get a quick gauge about how well you’ve got the financial side of your business under control.
So what’s your answer to the two questions?
Set a meeting with your CPA to talk about those two questions. It's a great step toward taking control of your cash flow.