BUSINESS Leadership in Crisis Mode MONTH ==> Sales DAY of the month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 TOTALS CATEGORY $ 14,570 SALES 44 N/A JOBS ORDERS $ 21,000 QUOTES $ 5,500 $$$ -IN $ 6,200 $$$ - OUT Volume Dollars Billed $ 7,750 $ 6,820 # of Sales Jobs Billed Open Orders Dollar Backlog SALES 23 42,000 21 51,000 $ $ $ 12,000 $ 9,000 2,500 3,000 New Quotes Dollars Daily - Cash Receipts - $$$ - IN Daily - Cash Disbursements - $$$ - OUT CASH $ $ 1,200 5,000 Daily - $$$ - Net Cash Beginning Balances ================> $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,300 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Cumulative Cash Balance $ $ $ (2,000) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ (700.00) 12,000 13,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 N/A $$$ - NET CASH ON HAND DASHBOARD REPORT October YEAR===> 2019 Daily - Accounts Recievable Balance $ 60,000 $ 65,000 $ 68,000 Daily - Accounts Payable Balance $ 40,000 $ 42,000 $ 42,150 Daily - Inventory Balance FINANCE $ 50,000 $ 60,000 $ 59,000 $ 20,000 $ 18,000 $ 21,000 Daily - Open Purchases Balance N/A N/A N/A A/R-Total A/P-Total Figure 1. A dashboard can be a good forecasting tool. You can download the full Excel file on the ALOA Tech Link app. and of course, customers’ actual payment practices. If a chunk of business is sufficiently profitable and otherwise desirable but payment terms and/or practices are unfavorable, you may be able to accelerate collections by offering early pay discounts or incentives. As mentioned, factoring certain receivables may be a solution, where appropriate. As counterintuitive as it may seem, there may be certain pieces of your business that you are better off amputating. Take a really close look at any business segment that requires dedicated personnel and/or equipment or that may be a drag on your business. You can reconstruct your P&L to play “what if” simulations to evaluate segment dumping. Forecasting One of the more important actions both before and aſter the storm is forecasting. Before the storm, forecasting represents 22 KEYNOTES JUNE 2020 your radar (business barometers) and is all about watching for the early signs that a storm is coming and, ideally, suggesting its severity and duration. Aſter the storm, forecasting takes on a more granular characterization, focusing on cash flow and the primary elements that drive it. You need a weekly cash flow forecast rolling calendar (expected cash in, cash out and the cash on hand balance) reaching out one month and for the first week, you should be forecasting daily. One very effective radar tool for any time, especially when forecasting an impending storm, is a dashboard. Just like the gauges in your car (gas, temperature, RPMs and the dreaded check engine light), you need a snapshot of the vital signs of your business. Although there isn’t an exact prescribed format, Figure 1 is a reasonable representation of a generic dashboard template. If you wish to use the actual spreadsheet template in Fig- ure 1, log on to the ALOA Tech Link app and look for this WWW.ALOA.ORG N/A INVENTORY PURCHASES
