Cash Management

Cash is the lifeblood of every company. We know that. You know that. But are you managing it as efficiently as possible? You will be if you work with us! We give you daily bank and cash account monitoring, as well as help you with your overall cash flow and cash flow optimization (no more overdrafts!)

Ultimately, our job is to ease your stresses and provide you with the knowledge and tools to make informative decisions. 

Why is it important that we monitor your accounts?

Reviewing the activity and transactions that hit the bank on a daily basis is a good way to monitor bank activity for the appropriateness of transactions and to keep an eye on your cash flow and bank balance. Furthermore, seeing your bank balance is a powerful motivator to save money, earn more, and avoid potential overdraft fees. We provide cash flow solutions & consulting to make sure you're on track.

One of the most common cash control procedures is the bank reconciliation. If we’re not keeping an eye on the bank account, cash flow and reconciling daily, it might be too late to catch any unauthorized action, which is why we watch it like a hawk!

Every day, without exception, we log into your bank account and reconcile the bank balance to the accounting software balance. We work with you on cash flow consulting & solutions, so we specifically check to ensure the bank balance and activity is reasonable based on the nature of your account. If any irregular activity is noted, we reach out to you to discuss possible resolution.

Strict review and consideration of the bank transactions is given during the reconciliation phase. We ensure that there are no unexpected payments issued out of the accounting software and that all vendor/client activity is reasonable given current operational demands. In addition, as your cash flow solution team, we ensure that all received checks have been deposited in a timely manner.

Why is it important to have a weekly cash budget?

The weekly cash budget is a major component of a cash planning system and represents the overall plan that depicts cash flow for a specific 7-day period. A cash budget, and the corresponding 13-week cash projection, can protect your company from being unprepared for seasonal fluctuations in cash flow. Your company’s cash position can be a very sensitive issue, as it determines how your vendors will be paid, how bankers will respond to financing requests, how fast a company can grow, etc. As your cash flow consulting team, we create this weekly preparation of cash budget specifically for you.

Why is it important to have a 13-week cash protection program?

The difference between a company that succeeds and one that fails is often cash management. Cash shortages can result in passing on profitable business ventures or the need for additional financing to overcome shortfalls. Even worse, cash shortages may cause a company to fall behind on their operational costs and ultimately shut down completely. 

The projection is a rolling 13-week look into anticipated future cash flow. At its most basic level, it is a plan. Our cash flow consulting team creates a plan for company owners and managers to achieve their goals for their company during a specific rolling 13-weeks (or quarter). It allows you to see what can be expected in terms of the company’s future cash position and operational demands.   

When looking at your cash budget, we analyze the following

Financing Needs. By creating the projection, you can anticipate and navigate through cash shortfalls. Specifically, when these cash shortfalls might need to be made up by borrowing (from a bank of private lender). Financing may be required to acquire inventory, fixed assets, or simply additional cash to pay operational expenses when receipts do not come in as expected.

Corrective Actions. From your projection, it will become apparent if the company has the cash necessary to meet upcoming obligations. While financing needs are a short-term solution, consider bigger issues that could be at hand 

Company Performance. The 13-week projection is a powerful tool. It illustrates not only cash position, but the trending performance of the company.

Strong cash flow may show a demand for the company’s product or service, followed by good collections, and ultimately freeing up cash to allow for growth.

Weak or declining cash flow may show the company’s inability to keep up with vendor payments and operational expenses. This could result in difficulties obtaining financing or worse, force them into bankruptcy. However, be advised that although cash shortages may be a sign of weakness, this is not always the case. Successful companies need cash for new business locations, added inventory levels, growing receivables, and so forth. In order to sustain growth, careful cash planning must occur.

Considering all of these factors helps a company to focus their efforts in only those organizational goals that are financially feasible. We also provide "Where Did My Cash Go?" a customized and simplified report of where your came from and went each month (no more wondering where your cash went each month!)  

Why is it important to know where your cash goes?

As your outsourced accounting department, we create and prepare the cash budget and the 13-week projection; both important management tools that allow us to focus on where your cash is projected to go. This "Where Did My Cash Go" document consists of: 

A starting cash balance (i.e., the first day of the month)

Actual cash received – commonly referred to as “cash in” – which includes items such as receipts collected, borrowings received from any sources of financing, capital contributions from owners, etc.

Actual cash spent – commonly referred to as “cash out” – which outlays for expenses such as payroll and other operation needs, costs of goods sold, capital expenditures, repayments to any sources of financings, owner, distributions, etc.

Net change in cash – which is simply the difference between cash in and cash out.

An ending cash balance (i.e., the last day of the month)

A point of contact for your bank (no more angry or vaguely threatening emails when you don’t provide them with the reporting they require)!

Why is it important that we're a point of contact for your bank? 

This is important on various levels. For starters, business owners often do not like to be bothered with this information, especially after they have hired us to do it! It could be because you don’t have time to attend to the emails and requirements, or simply because you are uncomfortable with the financial language (“A notice the bank calling the loan because we haven’t met our covenants? What does that mean?”). You are counting on us to maintain this banking relationship as well as to understand and meet the regulatory requirements specific to their loan, line of credit, etc.   

So, how do we maintain this banking relationship as well as to understand and meet the regulatory requirements specific to their loan, line of credit, etc.? For starters – 

We are prepared; we understand the bank’s mission, perspective, and regulatory requirements. This may require some upfront discussions with the bank, your client, and review of outstanding loan agreements.

We are involved; we are organized, open, thoughtful and forthright in communications. We show the bank that you’re willing to cooperate and know the right way to disagree (based on facts and communicated in a professional manner).

We keep our promises.

We treat your bank contacts the same way you would treat your client. We put a significant amount of time and effort in managing and developing our accounting & bookkeeping services &  positive relationships with our clients; knowing one major misstep can ruin a business relationship. Why not use the same tactics with banks and regulators?