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Tips for working ON and not IN your business

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Daily Financial Dashboarding


Cash is King!

Cash is king.

We’ve all heard that saying.  Well, in small businesses, cash flow is king. Most small businesses don’t build up operating or capital reserves, and many operate so thinly that unforeseen expenses can cause a panic. But it doesn’t have to be that way. Most business owners go through each day without knowing their true cash position. If you were able to see your current cash position each day, could you can make decisions that drive the business with much more confidence and efficiency? YES, I say, yes. (Try your best Foghorn Leghorn voice)

We teach our clients how to develop a Daily Financial Dashboard (DFD). Whether a spreadsheet template or just written on a post-it note, you should know some basic data as you start each day. We use a spreadsheet that shows our daily cash position in the office. Each day the adjustments are made depending on what we paid or collected the previous day, and our bank balance. We then adjust our 15-day forecasts (which we will explain below) to match up. We go a step further and make comparisons against previous periods so we can track growth. All of this was really was to set up in Excel so that we enter numbers and the sheet tells us the answers we need. Email us and we would be glad to share with you our generic sheet.  We also have a client developing business software that will include the DFD in the dashboard. will be live in late 2012 for small businesses.

So how does Daily Financial Dashboarding work in real life?

The other day we were deciding whether to buy some new office equipment. The discussion was around whether to upgrade several levels to account for growth or to keep the costs low. We were able to quickly determine by looking at our DFD to see that we had a increase on our 15-day forecast that was well above our average and projected but our expenses were static. Based on our growth pattern and the fact that we knew that we had room we decided to upgrade to plan for growth. This will help us greatly because it allows us to skip several small upgrades in the future. Ultimately, we will save around $2,200 in the next year. That’s nothing to laugh at for a small business trying to operate leanly.

“Enough blabberin’ already, show us the numbers!” (Again, use your Foghorn voice for effect)

Ok, so here are the 5 numbers you need to know every morning:

  • Current balances: the current cash-on-hand in your bank accounts as you start each morning. Almost every bank has an online system you can check from anywhere now. Use the app for your bank on your smartphone, or just check in your browser, but make sure you know this number each morning. Make sure you apply the rules that your bank may have for pending transactions, holds, or unfunded ACH draws, etc. You need to decide if you include savings accounts that you use for emergencies or small capital purchases, but NEVER, ever, add your operating reserve and payroll accounts. Those monies are either earmarked or for careful determination to be used. Leave them out of Current Balances.
  • AR Now: Pretty much self explanatory. What invoices are due right now today, include those that are overdue. Make it a point to follow up on them today. A note about past due accounts: as small business owners we tend to get wrapped up in our day-to-day and our staff does as well, and we let some things slip and get behind and next thing you know we are trying to collect from our clients and pay someone a percentage to do that for us. Keep on top of them, find out where they are in getting our payments to us. Show them you are willing to work with them. OFFER AN EARLY PAY DISCOUNT if you can. One standard you may see if the 15/5; if they pay within 15 days you will offer them a 5% discount. If you can make that work within your margins, or some variation thereof, you will see an uptick in on-time receivables.
  • AP Now: payments that you will make in the course of the day. Include both those that are due from billing statements and those that you will incur from petty cash, etc.
  • AR-15 (Money owed to us in the next 15 days): what invoices do you have out right now that are due in the next 15 days, you can use a list or you can just have the total figure, but know how much you need to collect in the next 2 weeks.
  • AP-5: (Payments due in the next 5 days): Same drill, the total amount you have to pay out where you have received invoices or bills, those that are regularly due, and any expected expenses in the next 5 business days. If you have a budget (that’s a whole other blog post we’ll get to soon) then include those budgeted items.


If you have cash sales that will clear during any of the time frames, add those in each day for the day they clear.

The Daily Financial Dashboard is not a budget. The budget is separate and is something you should do periodically that affects your business as a whole. We will talk about budgeting soon. The focus here is to get to the figures that you need each day to make sales, discounting, and expense decisions for your business to grow.

Attrieve, small business, advising

Ok, so now you have the picture, but you can take it one step further and help you determine the amount of sales activity that you need each day. We all think in terms of sales as monthly or annual figures, but what if you knew EXACTLY what you needed to bring in today. Hmmm, makes you think, huh. Next Friday we will address how to determine the exact amount of sales you need to generate to make your budget and your DFD match.

As always, if you need clarification, contact us.