August Musings – Cash and Random Thoughts

Aug 29, 2017 | Anne's Blog

Musing #1: It’s August here at my desk today. For many, often a month filled with vacation and down time. Down time is super important for rejuvenation and head clearing and begs the question — is your business prepared to keep on keeping on with no cash hiccups while you’re away? Did you build up a cash reserve to bridge the time of slower sales? Last month we talked about cash forecasting to estimate where your cash will come from and how it will get used. Did you take the time to look at your situation before stepping away? To give you at least a sense of what you might return to and not have your vacation bliss eradicated the first time you look at the books?


The more you know about and prepare for the ups and downs of ‘that cash movement thing’, the more relaxed your vacations will be. Seriously. Really.


My time away this month was spent with family and then on the beach for a few days watching the ocean and the backs of my eyelids and reading. During a particularly crazy downpour at my folks’ place, a phenomenal rainbow appeared just across their road. It was simply amazing and we all rushed for the pot of gold. Yet again, forecasting cash flow. 😊

Musing #2: One of the books I’m reading now is Financial Statements, by Thomas R. Ittelson. [Yea, I know you’re thinking, ‘that’s beach reading!?!’ Yes, and it’s a really well written book.] In the preface he writes:

“Watch where the money flows; watch where goods and services flow. Documenting these movements of cash and product is all that financial statement do. It is no more complicated than that. Everything else is details.

But why all so boring, you ask? Well, it’s only boring if you do not understand it. Yes, the day to day repetitive accounting tasks are boring. However, how to finance and extract cash from the action of the enterprise is not boring at all. It is the essence of business and the generation of wealth.


Not boring at all.”


Take a look at your business and watch where the money flows and where the goods and services flow. If you do nothing else, just this will illuminate a lot to you.


August Musings – Cash and Random ThoughtsMusing #3: I planted a young peach trees two years ago. This year, it has borne a harvest of two dozen peaches. Some of them are pretty dappled and might have a bit of bruising, but the taste and juiciness is terrific. They’re ‘good enough’ for a first harvest. Over the coming year I’ll work on tending, trimming and feeding this tree more effectively so future harvests bear even healthier peaches. Doing so will take some learning and analysis to make the best decisions about next steps.


As it is with harvesting a new crop, so it is with launching a new service in your business. Make sure it’s ‘good enough’ and get it out to the world. Assess the harvest (your sales dollars), the quality (unhappy clients, returns, things that didn’t work). Learn from them, analyze and determine what needs to be adjusted and then do it so that next years’ harvest can be bigger and better. I’d continue down this somewhat windy road of analogy but I need to Google “care of peach trees”.


August is a traditional time for rest and rejuvenation. Thought and reflection.


And now on to September.