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Old 11-14-2012, 07:59 AM
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etwman etwman is offline
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Join Date: Dec 2002
Location: central PA
Posts: 1,212
Cash Flow

Here's a topic I haven't touched on. Any seasonal company, especially in our industry will need to watch this. We all have ups and downs, it is what it is. We have our busy seasons and our slow seasons. You will have hills and valleys in cash flow and these swings tend to be bigger the further north you are since your season is shorter.

I've spent time with alot of landscape company owners over the years and it blows my mind at how few run weekly cash flow reports of their company. Those who have budgets are even less than that, but that's a story for another post. Not doing either is very dangerous and is the reason why most companies get themselves in a real mess. Here's what I do weekly:

Add: Cash, Accounts Receivables, Savings and come up with that total. If you are really a tracking machine you'll know to the dollar where you are at with each of your projects under construction with design/build. DON'T include in this client deposits on projects that you haven't started. Only include what you've done to date.

Delete: All payables, credit card balances, lines of credit, payroll for the week, etc. Long term liabilities (loans) do not need to be included in this. Just the next payment if its within 30 days out.

What is that number? Now run that number at least once a week. Record it on a spreadsheet. Begin to form a database of where you are at so you can go back and reference years past, where were you at this time last year? This should be part of your dashboard. If you don't know these numbers you are in serious trouble. I can tell you daily what that number is in less than 5 minutes for work ending the previous day.

There's your fall advice. And if your are constantly in the red you're lacking efficiency, spending too much, or not pricing things right, simple as that.
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etwman
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"Earth, Turf, & Wood, Inc. is a high-end residential landscape & hardscape company that offers superior employment experiences for employees, exceptional opportunities for our architects, a premium service to our customers and value to the community through service and stewardship. We attempt to honor God in all we do by encouraging teamwork, pursuing excellence passionately, serving those who lead, and demonstrating stewardship of resources."
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