Turnaround Specialist Shows You How to Manage Your Cash Flow
For a turnaround specialist, I can tell you that managing cash is most important in fixing a company. Without cash, you are out of business. Period.
If you engage a turnaround specialist, he will ask you immediately for your cash flow statements. The turnaround specialist will analyze your cash flow in detail and uses this analysis to fix your firm.
Since cash is so important, let me give you an outline of how our turnaround specialist firm manages cash flow when you engage us.
- We take immediate control of cash. This includes seizing the company’s
check stock to make sure that no cash leaves the firm outside our control.
- We must approve all outlays until we have fixed your business.
- We analyze your cash flow statements to understand where you have
been spending money and where it is coming from.
- We build a cash budget based our analysis. We include in our cash
budget eliminations of unnecessary spending and assume speeded up collections
from customers.
- We prepare a weekly forecast of cash. We forecast exactly whom we
will pay and when we expect to receive payments from customers.
- We give marching orders to the accounting team and sales force to
make the forecast happen.
- We review weekly our cash flow results versus our forecast.
- We hold accounting and sales accountable if we do not make our weekly forecast.
The goal of this approach is to make sure that your firm always has cash. While these procedures sound severe, they work!
(If this cash management procedure interests you, get a copy of Dan Betts’s excellent turnaround specialist handbook The Insider Secrets to Saving Your Business.)
After we have stabilized the cash flow, our next step is to fix the underlying cause of your firm’s troubles and prepare your firm for growth again.
Legal Disclosures / Terms of Use / Privacy Policy