Manage the Important Things
~ October 2019 ~
Welcome to the Merager Financial Solutions LLC newsletter. We're so happy you are here! Each newsletter provides a wealth of knowledge and inspires business growth.
Keep a close eye on your cash!
A thoughtful cash management strategy is critical as your company becomes more complex and profitable. Keeping a close eye on your company’s short- and long-term opportunities often separates an industry’s successes and failures.
1. Plan for regular operational payments.
2. Have sufficient cash during peak times.
3. Plan for capital projects, new product launches and new hires.
4. Take advantage of discounts, special purchases, and business opportunities.
5. Create a plan to secure outside financing at the best terms.
6. Plan to invest funds over long and short periods to maximize returns.
Ready for an audit? Are you protected from an embezzler?
To create a system that keeps your company safe, important documents should be immediately discoverable with little knowledge of any “system”.
1. Have the supporting documentation for each disbursement (purchase order, disbursement approvals, receipts, signing authority, etc.).
2. Have supporting documentation for every contract that has been signed.
3. ConsistentlyGet very organized people for clerical work (ask if they enjoy organizing their closet!) file legal documents such as deeds of trust and title for property.
4. Make sure that every record can be easily found.
5. Have a filing system that is scalable, easily understood, and consistent.
6. Use an electronic filing system that either automatically or periodically backs up your data to an independent and off-site storage location.
7. For transparency, provide access to all necessary leadership.
8. Make it a habit to always scan paper documents into your electronic system.
Collect all of the money you’ve earned!
Many companies have a culture of seeing “work done” as the point that the invoice leaves the shop, but the only meaningful indicator is when the invoice is paid.
1. Monitor your accounts receivable reports.
2. Follow up anything that is not paid within 30 days by emailing a copy of the unpaid bill.
3. Once a bill has aged 45-60 days, email the bill again and call the client to offer any assistance.
4. If a bill has aged more than ninety days without any outreach, a specific strategy needs to be implemented that removes all objections and creates a simple resolution for the client.
5. When creating your company’s budget, have a contra-asset account for bad debt that is reasonably close to the amount your company would write off each year (usually 2-5%).
Projects are how we make money!
A very powerful tool for any financial team to leverage for operations is clear and robust recording of project expenses and revenue. This type of recording helps leadership easily determine its return on investment (ROI). As important for management of that specific project, if managed very thoughtfully, each project can provide essential insight into future projects.
1. Create a project with business requirements, a review of expectations, identification of each required task and effort required, resource management, regular review with the client, and a clear close-out process.
2. Each project should be clearly defined for operational execution and financial results.
3. Have a regular meeting with the project manager and financial manager to review the results.
4. When creating the project, have a point where will company bail-out if profits, or revenue, stop meeting expectations.
5. Similarly, risks should be identified at the beginning of the project and reviewed at each project meeting.
If you need assistance with anything we’ve discussed here, let’s talk so you can reach your financial goals, growth, and revenue. Spend your time doing what you do best and make more money by having us solve your most pressing financial issues.