Three questions that can powerfully inform your vision of the coming year.

As December rolls around, most business managers turn their gaze optimistically to the new year.  Dreams of fulfilled goals, excellent sales, and extreme organization fill our heads.


And why not?  The end of something old and the start of something new is a good chance to reflect on what’s working and what’s not - to break down the big picture and come up with a clearer, brighter vision of the future.

So how do you breakdown financial successes and challenges to access the information that will powerfully inform your decisions about the future?

Here’s a guide. 

There are three questions that you should be able to answer, not just at the end of each year, but at the end of each month.

1.      Are we profitable?

2.      When is our money coming in and when is it going out?

3.      Are our clients happy?

The degree of detail in the answers of each of these questions will be dictated by the size and complexity of your operation.  Some organizations need to review the profitability of each individual service or product, while others simply need to understand that their gross income exceeds their gross expenses.

Some businesses need a very complex cash flow report that should be reviewed each week.  Others just need to know that their payables come in 15 days before their receivables, and they need to secure an interim cash source.

Some businesses need complex metrics around their customer experience, while other just need a face to face meeting with their clients once a year to get the info they need.

But here’s the magic word: numbers. 

As a business manager, you should have a number associated with each of these metrics.

It’s not enough to say, “Yes, we made a profit” or “I think our cash flow looks pretty good”.

How much profit are you making?  How does that number vary over each month?  What are the components that make up your net profit?

How much of a cash gap will you have and when?

How happy are my clients?  Do they refer other clients?  Have we increased their sales value with our company?

The numbers you come up with will help you make decisions about your business model, your financing and your client base.  Those decisions will help you build a business that is profitable and sustainable. 

And that’s a good start for a new year!

Cash Flow Reporting: The key to your future success


It’s difficult to achieve long term goals without some thought to cash flow.  Most managers can use emergency measures (personal cash infusion, holding back vendor payments etc.) to cover smaller blips in their bank balance.  But it’s harder to achieve stability in the long term without a plan. 

Cash flow reporting allows managers to look down the path and predict what lies ahead and make sure that they have the cash to create the vision they have in mind. 

If you were setting off across Atlantic Ocean in a sail boat and really, truly wanted to make it to the other side, you likely wouldn’t grab a pair of binoculars, your rain jacket, jump in the boat and say “I’m all set to go!”  You would gather information about seasonal weather patterns, previous used routes, and other traffic you might encounter.  You’d have satellite images, and a hotline to weather Canada.

It’s no different planning the future of your business.  Don’t count on your personal credit and some back of the napkin calculations to get you through!

Even in a highly profitable business, cash can be an issue.  You might have a big client who pays their bill late.   There can be planned or unplanned periods of expansion and contraction in your revenues due to seasonal changes in business, rollover in staff, economic factors or any of the other many variables.  Maybe you are hit with a broken piece of equipment or an unexpected legal issue. 

The result is less money in the bank.  And less money in the bank means it can be hard to pay staff and vendors, jump on opportunities and handle unexpected problems. 

So how do you create a cash flow analysis that will let you prepare and plan with confidence?

1.        Start with good information – The most powerful tool in understanding the future is using data from the past.  Financial information that is accurate and up to date is your best friend in helping you plan what’s next. 

2.       Just do it – You don’t get a perfect cash flow report the first time out.  It will take a while to develop a process and understanding that will give you the information you need.  If you’ve never done a cash flow review before, ask your bookkeeper to help you develop a one month forecast.  When you have a handle on that, move to three months, six months, a year, etc.  It takes time and consistent effort.

3.       Ask for insight – No one knows your business or organization better than you do.  But someone else might see things you don’t.  Review your numbers with your accountant, coach, colleagues to get their perspective on issues and patterns.  

4.       Stabilize – Once you have some insight into your cash flow from ongoing analysis and outside perspectives, start exploring how you can stabilize the numbers so that your cash balance allows you to act on opportunity and move towards your vision.  Do you need to grow sales, ask for shorter terms with clients, longer terms with vendors, or develop new streams?  This is where the real business visioning starts.


Cash flow reporting is an evolving and imperfect process.  You can’t predict the future with 100% certainty.  But the information you garner from returning over and over to your numbers will be powerful partner in growing your performance.


At STAR Company we have lots of tools for getting you started with cash flow or for improving and refining your process.  Drop us a line – we’d be happy to chat!