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Posted by: Charles P Myrick CPA Posted on: Jun 19 2020 Posted in: cash flow management, Pandemic

Making a Case for Weekly Cash Flow Analysis

In this time of COVID-19, managing cash flow is more critical than ever. A new commitment to cash flow planning and management is needed. Projecting the results of reduced income, even if temporary, will guide changes in spending priorities, billing, and business model. In my work with small businesses I have seen how necessary current cash flow projections are to quantify those changes.

A potential cash flow crisis becomes a reality when businesses experience a significant loss of revenue. Most companies rely on a monthly schedule to review their financial information. During a crisis and its aftermath, relying on monthly statements can prove inadequate to respond quickly to cash challenges. Further, many small businesses may miss significant opportunities to make decisions that will keep them afloat.

Weekly Cash Flow Process

My team and I recommend a weekly cash flow process to our clients. Why? A financial emergency requires a strategy for quickly planning and implementing realistic options. Reviewing, monitoring, and projecting cash activity weekly will help you immediately make critical decisions that will impact your business's survival. Projecting the results of reduced income, even if temporary, will guide changes in spending priorities, billing, and business model.

Weekly cash flow projections are necessary to quantify those changes in an environment that is continually changing. For example, in an emergency, you probably want to know, "How long can we survive with the level of cash we have today?” The answer comes from a weekly analysis of your cash burn rate. A burn rate measures how fast a company spends its available cash. The analysis helps you make decisions that can make your cash last longer.

CFO Services Focus on Weekly Cash Flow

One of the best things that you can do is contract out your accounting services. A small business accounting firm that offers CFO services will conduct a cash flow analysis of your funds so that you take a proactive approach to controlling your cash flow. A CPA will help you implement a weekly cash flow process that will vastly improve your ability to deal with the challenges of a financial crisis.

Let me know when you would like to talk. As planners, we are here to assist you in navigating simple solutions.

Stay safe, stay well, and stay tuned,

Charles and the Myrick CPA Team

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Charles P Myrick CPA, Washington DC tax preparation firm, specializes in accounting and bookkeeping services for small business and entrepreneurs. We invite you to learn more about the small business accounting services that are available: (202) 789-8898.

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