When our team meets with a new client, their first goal is usually to increase sales.
While important, sales should not be the primary focus.
Sales is a simple number measuring one aspect: your customers’ purchases.
Cash flow is a more complex number measuring all aspects of your business, including how much cash you retain.
We are working with a start-up company seeking to find its footing.
The marketing team wants “sales at any price” to gain traction in the market.
A loss-leader approach is OK sometimes, but not when it fosters the wrong culture and mindset around sales.
As you might guess, the accounting department found that these sales caused a huge loss, accelerating the burn rate to potentially fatal levels if not stopped.
This created inter-company resentment and weakened the team’s ability to work together.
What did Cash Flow Mastered do to help?
We built an analytical reporting system, superimposed on top of their accounting system, that tracked sales and cash flow at the individual sale, and at the company level.
The analytical reporting system projected sales and cash flow for six months and twelve months into the future (it would have been longer had it been an established business) to measure the burn-rate and the likelihood of survival.
One important benefit was that sales and accounting developed a better understanding of each other, leading to greatly increased collaboration.
Click here if you would like to see a pro forma reporting packet like the one used for the client.