What are the best tools or methods to track your small business cash flow? (2024)

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Look at your money every day!!! 😳 I learned this several years ago from @GrantCardoneEvery morning, even on the weekends I open up my mobile banking app to see what money is being deposited or withdrawn from our business account. They have been many times in the past 20 years when the account balance is close to zero. Or even negative. This is one of the untold truth of being in business for yourself, but no one likes to share. But it’s a reality as you build your business. When the account balance is getting very low, it makes me ask this simple question that I also learned from Grant … “ who’s got my money?”In times, when the account balance might be high, allows me to feel gratitude for what we have accomplished.🔥👊❤️

I believe this is the best way to track many things in your business. Not just cash flow but profitability by departments or products. So much can be done with this tool.

One thing we have found helpful is partnering with our CPA to conduct a proactive cash flow forecast. We export our cash flow from Quickbooks into Excel and then project forward 12-18 months to help us plan for the ups and downs of income and expenses.

I must admit, this is a weakness in our business. It really is an essential forecast of where the money will be flowing inside the organization. I will be learning from these posts on how to make that better.

I am open to learning ideas in this area is a struggle with this in my business. Any suggestions or opportunities to learn more would be appreciated.

Another tool to employ here is the Cash Conversion Cycle Map where you map out the journey of cash through each function of the business (e.g. Sales to Onboarding/Operations/Customer Service to Finance, etc) to help identify cash-sucking functions/departments/processes. It helps visualize where cash is getting delayed or lost, and where you can implement greater cashflow efficiencies.

In my opinion, usually a company would look at this ratio on an annual basis or if they were thinking of maximizing profit to sell a company. It's not a great ratio for managing a business as it's a lagging indicator.

Cash flow budget is usually done annually. What should be considered for a comprehensive budget is the sales forecast and the related supply routes. There is a need for more than one scenarios regarding sales and supply. Among those scenarios, which should be selected is the achievable one with acceptable profitability and risk. In order to realized the selected plan, there is a need for perfect documentation on assumptions, criterias, investments, debting, and most importantly, the task list of each department.During the year, the budget should be compared with the actuals, variances should be analyzed, and updated if necessary. The cash flow budget would be a mentor to the company.

This is great and important but hard to know when first starting out. Out together an excel doc for starters and then track on a regular basis. Learn from the data, pivot as needed and no matter what always protect your downside.

Conventional cash flow softwares are quite short-termed. It contains the sales orders received, bills, and fixed costs such as rent and labor. By adding financials, tax, and the other official costs to the game, it will give a brief idea about the company’s next period. But the beyond is the sailing towards stranger tides;•No sales orders•No supply plan•Unknown capacity utilization•Insufficient resources for financingUnder such circ*mstances, cash flow software needs a support, that is, a program to work on supply chain planning. A reliable APS (advanced planning & scheduling) would be the company’s pathfinder.

We have been using QuickBooks for many years in our business. This has been an amazing tool for us. We just exceeded $10 million in annual sales and it’s still working for us.