By Brittany O’Brien, strategic marketing coordinator

In PICPA’s webinar on Feb. 15, Cash Flow Practices for Effective Business Management, Donita R. Rudy, principal at Compass Advisory Partners, gave us an expert look at cash flow when dealing with business management for your company.

In this webinar, Donita focused on how cash flow practices can lead to more favorable outcomes and better management. Many contribute to business failure, but internal factors play a vast role. Inadequate management creates internal crises which in turn causes external problems. If you limit internal issues, the external problems will be easier to defeat. CPAs are key players when it comes to enhancing management and making it more effective. Keep Rudy’s best practices in mind as you work on your company’s management plan.  

10 Practices for Effective Business Management

1. Focus on Skill Sets
   Focus on what contributes to your company’s cash flow projections. In terms of planning and maintaining a positive workforce, some key skills to focus on are strategic planning, communication, time management, and problem solving.
2. Enhance Management Knowledge
   Share, create, and maintain information to benefit your team and aid in successful management.  
3. Step Back and Do an Independent Assessment
   To develop a properly managed business, first look at yourself. Ask yourself, what improvements need to be made to increase the business’s cash position? What is your monthly sales break? What is your monthly cash burn rate?
4. Managing Data and Measuring Cash Flow
   Analyzing, sorting, and processing information regularly ensures better management decisions and cash flow measurements.
5. Forecast Summary Points for a Weekly Cash Budget
   Cash analysis allows you to focus on areas of opportunity and examine your accrual of expenses. These statistics allow you to examine debt repayment and monthly revenue.
6. Scope of Management
   Poor leadership, processes, and assessment can lead to bad management. Have a grasp on asset growth and debt radionics as well as overexpansion and assigned accountability.
7. Action Planning
   Be prepared for change, and be aware of financial restructuring that may be necessary. Becoming conscious of cost reductions and timing of funds is crucial.
8. Healthy Cash Position
   Poor leadership, processes, and assessment can lead to bad management. Have a grasp on asset growth and debt issuance as well as overexpansion and assigned accountability.
9. Rapid Change
   Stay in the know with common spending trends and cash models.
10. Cash Flow is King
    Accrual of expenses and static information over specified periods will lead to a happy business. Using cash flow analysis as a management too, allows for projection of future spending.

If you like this blog, you will enjoy Donita Rudy's next webinar on Leadership-Driven Financial Practices for Business Success:

May 3 | Achieving Efficient Operations through Financial Management Practices