“Automation applied to an inefficient operation will magnify the inefficiency.” 

- Bill Gates

I am constantly asked, "What software do you use to implement cash flow management?"

My answer: "I start with an Excel model."

Usually, people are surprised and even disappointed. They want to believe that there is a "silver bullet" that magically picks up their accounting data and will automatically tell them how to improve their cash flow.

It just doesn't work that way.

Why? Because....

Most companies have a very inefficient operation when it comes to managing their cash flow.

Building out an Excel model becomes a conversation about how all the pieces of cash moving into and out of the company fall into place.

After you understand the movement then you can automate the model.

Do you use automation in your business? I'd love to know how, and if it took some time to make it efficient.

Let me know in the comments below!

Why don't employers see the huge CASH cost of losing their best people, and give them what they need to stay?

Employers spend a lot of extra money when they lose their best people. Here are some of the incremental hard costs:
- Training costs for a new person
- Recruiting costs

Even bigger are the "hidden" costs:
- Employer's time to recruit
- Lost productivity
- Emotional cost to the team

What would it take to keep the best people?
1. Ask them. They'll tell you.
2. Some money. Less than replacing them.
3. Recognition. Get creative and see #2.
4. Bonus idea: Reward them with something that benefits their significant other and/or family.

Back to the cold hard cash facts. Studies show it costs you 33% of someone's annual salary to replace them. You can keep people for a lot less.

Am I right? Wrong? What's your experience?

Let me know in the comments below.

#wtcfg #humanresources #finance

The first time I went skiing as a teenager I watched my classmate beautifully ski down the hill and, in slow motion, turn gently to the left and ski into a barn.

The barn wasn't anywhere near the bottom of the run. It was way far away and posed no danger to anyone. But as the instructor shouted "Stay away from the barn!" her turn became sharper until she was pointed directly at the big, red barn!

I suspect that her problem was that she focused on "not hitting the barn" instead of going straight.

That's a lot like when in business we are focused on preventing a result instead of focusing on the result we do want. We often end up "hitting the barn" instead of getting the result.

When I ski and I'm moving fast, I always need to focus on where I need to go and I consciously block thinking about obstacles that could cause danger. I know the danger is there, but I focus on where I want to go.

The same in business. Focus on where you want to go.

I'd love to hear any comments you've had, or...

Follow this link to listen to the episode on Apple Podcasts.

I had a great time on The Courage to Lead with Harlan Hammack discussing cash flow optimization (including some counterintuitive tactics), planning for the future, explanation of some of my offers here on the website, and more. 

I also got to share a bit more of my own story of how I came to be involved in cash flow advising. It was not an easy decision, but it was a logical one.

Coach Harlan was a great host - big thanks to him!

Follow this link to listen to the episode on Apple Podcasts.

In this episode, I discuss the ins and outs of calculating cash flow.

Click here to listen on Google Podcasts.

Have an idea? Anything I missed? Let me know in the comments below.