Getting your business' cash flow in order is one of the most important elements to a successful and growing business. But how do you start the process? Follow these actionable steps for getting organized and improving your cash flow.

1. The 5 Pillars of Business Freedom
Pillar #1 - FINANCIALS
How to Get Your
Cash Flow In Order
EVOLUTION CAPITAL PARTNERS

2. This is Business-Owner Mike.
He’s been
leading Mike’s
Services for
about 10 years
now.
EVOLUTION CAPITAL PARTNERS

3. As Mike
tries to
grow his
business,
he is
struggling
to keep his
head above
water.
EVOLUTION CAPITAL PARTNERS

4. He
struggles to
pay his
employees…
EVOLUTION CAPITAL PARTNERS

5. …and his debtors.
EVOLUTION CAPITAL PARTNERS

6. If only he followed a few
best practices, he could
achieve financial freedom
and spend money on
revenue-generating
projects…
…instead of just staying
afloat...
EVOLUTION CAPITAL PARTNERS

7. The Answer?
Cash Flow Management
It’s not as hard as he might think.
EVOLUTION CAPITAL PARTNERS

8. Mike needs to start making accurate
cash flow projections.
…with 3 easy steps.
EVOLUTION CAPITAL PARTNERS

9. 1. MEASURE CASH FLOW
Mike starts his cash flow projection with
this simple equation:
Cash On Hand
+
Cash To Be Received
EVOLUTION CAPITAL PARTNERS

10. Mike has to work with his team to answer,
“How much cash are we going to get from:”
•
•
•
•
•
Customer Payments
Interest Earnings
Service Fees
Partial Collections of Bad Debt
Others Sources
…and when?
EVOLUTION CAPITAL PARTNERS

11. Mike also needs detailed knowledge of the
amounts and dates of upcoming cash
outlays.
That means not only knowing when each
penny will be spent, but on what.
EVOLUTION CAPITAL PARTNERS

12. Know the Details
Have a line item on your projection for every significant
outlay. Examples include:
•
•
•
•
•
•
•
•
Rent & Utilities
Salaries and Wages
Taxes
Benefits paid
Equipment purchased for cash
Office Supplies
Advertising
Vehicle and Equipment Maintenance and
Fuel
EVOLUTION CAPITAL PARTNERS

13. 2. IMPROVE RECEIVABLES
In a perfect world, Mike would get paid for
sales immediately.
In the real world, that doesn’t happen.
But he can still improve his cash flow by
managing his receivables.
EVOLUTION CAPITAL PARTNERS

14. Mike needs to turns his…
Material &
Supplies
into
Products &
Inventory
into
Receivables
into
Cash
fast
EVOLUTION CAPITAL PARTNERS
er!

15. Offer discounts to customers who pay their
bills rapidly and shorten payment terms for
others (ex. 45 days to 30 days).
Ask customers to make deposit payments at
the time orders are taken.
Require credit checks on all new non-cash
customers.
EVOLUTION CAPITAL PARTNERS

16. Get rid of old, outdated inventory for any
amount of money.
Issue invoices promptly and follow up
immediately if payments are slow in coming.
Track the progress of receivables to identify
and avoid slow-paying customers. Institute a
policy of cash-on-delivery to refuse to do
business with slow-paying customers.
EVOLUTION CAPITAL PARTNERS

17. 3. MANAGE PAYABLES
Mike is managing a growing company so he has
to watch expenses carefully.
In order to do that, he has to follow these best
practices…
EVOLUTION CAPITAL PARTNERS

18. Control Costs
If expenses grow
faster than sales, you
have to examine
costs carefully to find
places to cut or
control them.
EVOLUTION CAPITAL PARTNERS

19. Extend Payment Terms
Take full advantage of creditor payment terms.
If a payment is due in 30 days, don’t pay it in 15
days.
Use Electronic Funds
Use electronic funds transfer to make payments
on the last day they are due. You will remain
current with suppliers while retaining use of
your funds as long as possible.
EVOLUTION CAPITAL PARTNERS

20. Choose the Right Supplier
Don’t always focus on
the lowest prices when
choosing a supplier.
More flexible payment
terms can improve
your cash flow more
than a bargainbasement price.
EVOLUTION CAPITAL PARTNERS

21. Be Open With Suppliers
Communicate with your suppliers so they know
your financial situation.
If you ever need to delay a payment, you’ll need
their trust and understanding.
EVOLUTION CAPITAL PARTNERS

22. Read Contract Details
Carefully consider
vendors’ offers of
discounts for earlier
payments. These can
amount to expensive
loans to your
suppliers, or they
may provide you with
a chance to reduce
overall costs.
EVOLUTION CAPITAL PARTNERS

23. Now that Mike and his team know the Financials
inside and out with
Measuring Cash Flow
Improving Receivables
and
Managing Payables…
EVOLUTION CAPITAL PARTNERS

24. Mike can
plan ahead
and focus
on growing
his
company.
EVOLUTION CAPITAL PARTNERS

25. What’s next? Establish a
Plan based on your
detailed financial metrics.
Stay tuned.
EVOLUTION CAPITAL PARTNERS

26. Want to know more?
Visit: www.evolutioncp.com
Call: 216-593-0402
Email: info@evolutioncp.com
Sign up to receive email updates on
new tools, tips, and advice on making
your business profitable.
EVOLUTION CAPITAL PARTNERS