Cash Flow Management and Modelling from a Practical Business Perspective

Posted 03 March by Barb Easter in Uncategorized

….or in other words, you’re wrong.

Your Clients Love Dryrun‘s Approach

The below text is an edited version of the above video.

Dryrun’s software is fundamentally different in our approach forecasting, management and modeling. It’s business oriented and holistic and it’s that framework of being both a business-oriented and holistic tool that I’m going to dive into today.

What Business Owners Want

When I’m first approached by financial professionals it’s often because their clients are agitating for change.

Clients want an easy to use, easy to communicate about, flexible, barrier free, jargon less secure tool that that can just trust to translate and manipulate financial data and apply that to forward-looking operations without drama and maybe in off-hours.

Financial professionals however are…not looking for change.

The culture of owning a business has already changed. The tools have come to market and there’s no fooling your clients in this regard. When we came to market there was no tool that allowed you this type of forward-looking intelligence. There was only rear-facing tools that were historic by nature as is the nature of accounting and your relationship with your accountant.

Questions for Accountants

The first question I ask is what does your YOY new client growth in your practice look like. As a summative statement, growth is tanking.

Second, I ask if you have any experience in cash flow management modelling forecasting up to the present. Sometimes I hear that it was project based, or I hear that this type of advisory was rolled in to the engagement indicating that the CPA doesn’t think it has enough chops to stand on its own and be billed separately.

If I continue to push during our discovery call, I hear: if my client insists, I run a statement of cash flows – (this is neither management nor modelling).

If either party is really keen they might do a limited amount of very complex operational modeling in Excel (except everyone hates it because compensation is broken because it’s so fragile and time consuming.)

Finally, I hear the bank has requested a two to five-year forecast.

99% of Accountants Miss the Point

What I hear from 99% of accountants is that they “perform cash flow management” as part of a cluster of disconnected, tedious, poorly positioned tasks that are approached piecemeal and without much enthusiasm by the accountant.

This is not how Dryrun rolls. The paradigm shift has occurred for your clients and it’s time for finance and accounting to catch up.

Your Clients Want a Business Tool

Businesses Want a Tool That is Capable of Driving Operative and Strategic Decisions

Must haves:

  • Business-oriented
  • Practical
  • Based on own financials
  • Holistic (across timelines and dovetailing relevent business units)
  • Easy to use
  • Event-based
  • Easy to speak about
  • Flexible
  • Collaborative
  • Barrier-free
  • Jargon-less
  • Secure

If you can’t imagine this, or think it’s too cumbersome, it’s because you haven’t yet met the right software and mentality yet.

Next Steps for Accountants

Eventually if the accountant in question has a flexibility of mind to accept education from someone who lies outside their professional domain of expertise, that is me, in business, I educate them to look at the three tasks of cash flow simultaneously the way their client wants to.

  • AP/AR Management
  • Operational ‘What ifs’ – 3 – 6 months out, flexible potential plans to drive revenue and growth without bankrupting the company.
  • Revenue Projections – 1 year rolling projection of cash flows

If CPAs want to move into the advisory space they do well to embrace forward-looking tools that rely on historic data as well as developing their own communication skills.

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