Skip to main content

“Employees might forgive you if you ask them to work late. Vendors might forgive you if you miss some paperwork. Even your golf buddies may forgive you if you use the eraser on the scorecard. But no one—I mean no one—forgives you if you ever run out of cash.”

Want to improve and sustain the health of your business? Get serious about how you manage your cash flow. It’s the one key variable that keeps three of your most valuable business assets healthyemployees, vendors, and customers. Just know that if you run too low on cash, your problems become visible to the world, and you will soon push your best employees, vendors, and customers to seek a new company to work with.

The First Rule of Business: Never Run Out of Money

Cash flow is as ever-changing as the financial climate. A business that’s in a continuous state of cash crunch can never thrive, only survive, if that. Cash shortages force you to direct all of your energy towards managing cash—not managing your business, your big initiatives, your product launch, or anything else. Those all get pushed aside to deal with the ongoing cash crisis.

Most entrepreneurs focus excessively on their income statement and too readily confuse robust sales or net income with cash. Say you had record sales this month, and, as a result, you sign that big lease on a new office. Then 90 days later you learn the new customer never paid and is canceling planned orders. Another mistake is to make decisions based on their current cash balance—a distribution to buy that lake house— then the controller tells you the balloon payment on that term loan is due in six months. To keep your business from bleeding money, you have to understand all the facets of cash flow and be proactive about monitoring your cash commitments relative to the amount in reserve.


Running out of cash means angry employees.

If your business is running out of cash, your best employees will be the first to leave because the company doesn’t fulfill customer orders on time or pay bonuses.

Running out of money means frustrated vendors.

Not having money to pay your vendors means you’ll have to pay expensive penalties and high-interest rates. Or worse, they force you to pay in advance or even stop shipments altogether. This is when your cash problems become visible. Whether you like it or not, people talk and the word will get out. Soon your brand is being damaged and word spreads to your vendors, competitors, and customers that you’re in dire straits.

Running out of money means disappointing customers.

Lack of funds can trigger a chain of gut-wrenching consequences, all impacting your hard-earned customers when orders can’t be filled as promised. When your business starts to adversely affect your customers’ businesses, it’s only a matter of time before even the most loyal customer finds another partner.

Secure Your Company’s Future with a Rolling 13-Week Cash Flow Forecast

You might be wondering, “What is a rolling cashflow? Is it just another spreadsheet?”


A rolling cash flow forecast gives you a picture of exactly when and why you will run out of cash so you can avoid this scenario. A rolling cash flow is a road map that gives you a comprehensive overview of your cash reserve, how much money is coming in and from where, vs. going out and when. Its purpose is to provide you with clear visibility of your cash health for the next three months. It gives you time: Time to call customers, time to delay new commitments, and time to have panic-free discussions with your banker. It will also give you freedom: Freedom from 12th-hour surprises and sleepless nights.

You will be able to know, at all times, when you can fund bills, purchase new equipment, hire new employees, expand to a new location, and more. Furthermore, you will have a concrete idea about your financial obligations, such as who still needs to get paid and how much debt you still have left to tackle.

Using these insights, your business can run smoothly and dodge the cardinal sin of running out of cash!

End Cash Flow Nightmares: Outsource Your Cash-Planning to a Fractional CFO

As a business owner, your time is one of your company’s most valuable assets. Time to land a new deal, develop the next technology, or nurture a critical relationship. For most entrepreneurs, the best use of their time IS NOT analyzing numbers and managing cash flow. These tasks frequently steal your mental energy and deplete your passion—the very fuel you need to drive the company forward.

A Fractional CFO can help. We are outsourced CFOs who enjoying doing this work, and love giving you the insight and direction you need to stay out of trouble. Fractional CFOs are brought in on a part-time, retainer, or project basis. Some of the common problems they help resolve include:

  • Cashflow problems
  • Securing bank loans
  • Profit optimization
  • Preparing for an audit
  • Product and customer profitability analysis
  • Negotiating and integrating acquisitions

Since Fractional CFOs continuously work with businesses large and small, their broad knowledge helps them tackle financial challenges through a unique lens.

They can help with goal-setting and making sure the company’s finances are always in order. They can develop short- and long-term forecasts. They can also help position your company for a smoother transition during times of high growth or economic downturn.

A Fractional CFO gives your company that extra oversight so that your account is never in the red.

If you’re serious about ending your cash issues, schedule a call to review your rolling cash flow!

We’re here to help you wade through the complicated waters of finances to get you from where you are now to your goal. Schedule a free one-on-one consultation with an expert CFO today!