7 Questions for Better Cash Flow

Cash Flow Basics

someone turning the knob on a faucet as gold coins flow out of the spicket

We surveyed Pulse customers and learned that 80% of them manage their cash flow daily.

It’s important to stay on top of your cashflow, yadda yadda…. But seriously, carve out half an hour this week. Get out of the office or wherever you typically work. Buy yourself a hand-crafted latte at one of those fancy third-wave indie coffee shops where everyone has a better haircut than you. Turn off your phone. Take out a pen, paper and your laptop.

Quit every application, Mail and Slack included.

Invest 100% of your creative and critical faculties in honestly answering these seven questions:

1. Are you managing your cashflow?

Even if your business turns a massive profit annually, you could find yourself cash-strapped in the summer because of a lull in receivables. When you’re managing your cashflow, you’re timing payments and tying your expenses to income to avoid a cash crunch. Pulse is great for visualizing these gaps so you can manage them.

2. Are your cashflow projections accurate?

Do a side-by-side comparison of your actual numbers and projections. Does your cash flow sync up with what you budgeted? If so, great! If not, you should dig in to figure out what happened so you can plan better.

3. Are you making more than you’re spending?

Hint: The answer you’re going for is “Yes.”

4. How can you cut spending?

Think big but think small too. Cut back on small things that don’t have hurt morale before you cut big things that people will really miss. High-quality coffee matters!

5. How can you increase profit margins?

You can start by raising your rates. If you’re in a service business, raising your rates by $10 an hour might have a big impact.

6. Do you have a plan for reinvesting profits?

Invest in things that increase efficiency and convenience, decrease risk, and create new opportunities (e.g., new capabilities, equipment, and people).