Cash Flow Analysis Questionnaire

2.2 Where your inventory has a substantial portion of staff hours (“work in progress”), do staff record their hours electronically in a way that syncs with your accounting software?

Yes

2.2 C User Comments

2.2W Your staff are required to submit timesheets, but you do not use dedicated software for that purpose.

2.2R Replace paper or spreadsheet-based timesheets with dedicated software. We can help you source cost-effective, smart-phone enabled apps that sync directly with your GL, so field staff don’t have to chase or deliver paper forms and finance staff have more time for adding value - not entering data.

3.1 Do you breakdown your financial information so that it meets your needs? For example:

3.1a Do you break down the income statement between revenues, cost of sales/ gross margin, operating expenses, depreciation, interest, and taxes?

Yes

3.1a C User Comments

3.1b Where you have more than one product line, do you produce information by division (eg. Commercial/ Residential)?

Yes

3.1b C User Comments

3.1c Do you budget, track and produce information by product (service) and/or by project?

Yes

3.1c C User Comments

3.1W You don’t currently break down your financial information into as much detail as you need.

3.1R Collect the right information, and put it in the right buckets, to know where you are (not) earning money. Your income statement should have at least the standard categories from Revenues down to Net Income. Admin costs don’t belong in the Gross Margin bucket. Create divisions to analyze your Commercial results separately from your Residential ones. Track revenues per client and per job where possible. You may need to reconfigure your GL to capture all the information you need - ideally, automatically as you process transactions.

3.2 Do you set revenue and expense budgets for the financial year?

Yes

3.2 C User Comments

3.2W You do not currently set revenue and expense budgets on an annual basis.

3.2R Set a business-wide budget each year. Create it in as much detail as you need, but make sure you group it the same way as your other reporting: financial statement figures, split between eg. Divisions and/or Offerings). You should be able to easily update the budget on at least a quarterly basis, so that you can always see 12 months ahead (a “rolling” budget).

3.2a Do you first budget by division/ product/ service, which then automatically aggregates for you to evaluate in total?

Yes

3.2b C User Comments

3.2a W You cannot confirm that your budgeted figures on a product-line or divisional basis add up to the total in your annual budget.

3.2a R Select budgeting software that first creates your subsidiary budgets and then automatically aggregates them so you can evaluate the total. The reverse can leave you with a nasty shock later in the year, when your detailed results look good but you’re still short.

3.3 Each month-end, do you receive:

3.3a ...reconciliations and analyses of all your balance sheet accounts?

Yes

3.3a C User Comments

3.3b ...a detailed variance analysis of your income statement, with explanations for significant variances, based comparative period actuals (month, QTD, YTD)?

Yes

3.3b C User Comments

3.3c ...a comparison of your financial results to the comparative period-to-date budgets (or revised forecasts)?

Yes

3.3c C User Comments

3.3d ...your financial ratios, again with an analysis of the figures to comparatives and budget?

Yes

3.3d C User Comments

3.3W You do not receive all the detailed financial analysis you need, each month, so that you have your finger on the pulse of your financial results.

3.3R Your accountant should create a month-end reporting package. It should include income statement variance analysis, balance sheet reconciliations, and ratio analysis. All of these should be compared to budgeted and historical figures as appropriate. We can help you move towards automating your finance department, so it can spend less time on preparing the information, and have more time to evaluate it to manage your business better.

3.3e Do you receive budget revisions on a regular (monthly, quarterly) basis, so that you can create a forecast for the remainder of the year?

Yes

3.3e C User Comments

3.3e W You are not easily able to revise the budget on a periodic basis to create a forecast.

3.3e R You should be easily able to revise your annual budget to create a forecast on a quarterly, or perhaps monthly basis as required. The forecast, like the budget, should ideally be on a “rolling 12-month” basis.

3.4 Have you compiled a list of non-financial “scorecard” / Key Performance Indicator measures?

Yes

3.4 C User Comments

3.4W You do not compile “Key Performance Indicators” on a monthly basis.

3.4R We can help you identify and produce non-financial “dashboard” data. For example: for operations, look at staff or machine utilization; for marketing, look at sales funnel and SEO/ website traffic data.

3.4b Do you review those KPIs on a monthly, or more frequent, basis, as appropriate?

Yes

3.4b C User Comments

3.4b W You do not review your KPIs on a monthly (or more frequent) basis.

3.4b R You should update these KPIs each month-end, so that you can paint a picture of your performance across the board, not just financially.

4.1 Do you track your sales and profits by individual customer and/ or demographic?

Yes

4.1 C User Comments

4.1W You do not track sales and profits by customers/ demographic.

4.1R You should track buying patterns and profits by individual customer (or group). This is easier and less expensive than you think. You can target the people who already buy your most profitable offering – and sell additional, high-margin business to them.

4.1b Do you also tie that back to their payment patterns?

Yes

4.1b C User Comments

4.1b W You do not explicitly assess customer payment history when evaluating their profitability.

4.1b R When you evaluate your customers, make sure you include a payment dimension, so that you do the most business with the people who routinely pay you the fastest.

4.2 Do you track your sales and profits by product (or service)?

Yes

4.2 User Comments

4.2W You do not track your sales and profits by product (or service).

4.2R You should track profitability by product or service offering. This should be part of your month-end procedures.

4.3 Do you apply overheads in a way that best reflects how it is generated? For example:

4.3a machinery depreciation to inventory/ division based on (preferably) usage time by product, or (alternatively) direct labour hours?

Yes

4.3a User Comments

4.3b automobile depreciation and finance charges to the relevant division based on mileage driven?

Yes

4.3b C User Comments

4.3c corporate overhead, such as finance, based on staff time spent by division (if possible), or alternatively revenues?

Yes

4.3c C User Comments

4.3W You do not always apply overhead in a way that best reflects how it is generated.

4.3R Applying overhead, including depreciation, using an inappropriate method, or to the wrong products or divisions, will skew your financial results. Skewed results will lead to bad decisions. Apply overhead in a way that makes sense for your business, and that gives meaningful results. We can advise you on how to charge overhead in a way that better captures the cost of running the parts of your business.

5.1 Do you have clear policies on how to select suppliers?

Yes

5.1 C User Comments

5.1 W You do not have clear policies on how you select suppliers.

5.1R Set up supplier guidelines and delegate the admin time so you can spend time serving customers. Guidelines should be simple: eg. “we only buy stationery from our account/ discount card with BigBoxStore [they may not always be the cheapest, but they have everything, and it saves us multiple trips]”. For larger purchases: “if we’ve not done this before, get three price quotes for every job over $X. After some experience, approach the best vendor and ask for rebates based on volume purchases”.

5.2 Have you set clear authority limits for purchases and for payments?

Yes

5.2 C User Comments

5.2a ... or for other transactions, such as estimates, credit limits, and customer credit notes?

Yes

5.2a C User Comments

5.2 W You have not set up all the time-saving authority limits you could.

5.2R Every hour you spend on finance/ admin is an hour not spent selling profitable work. It adds up: 100 small payments per month at 2 minutes to review and approve each one is a full 40-hour work week (200 mins/mo * 12 mos / 60 mins/ hr) each year. If “small” is “under $100”, the average is probably $60, so your _ maximum_ cost savings of $72,000. You’re likely better off spending that week on sales. We can help you set up enforceable policy limits (for your staff, so that they take care of the trivia), and proper controls (for you, for your peace of mind). You should put other similar limits in place estimate, credit limits, and credit notes. The payback will be a huge reduction in time spent on low-value admin tasks.

5.3 Do you use (dedicated) software to administer employee expense and mileage reports?

Yes

5.3 C User Comments

5.3W You do not process expense and mileage claims using dedicated software.

5.3R Paper expense reports have all the same drawbacks of paper timesheets. We can help you source dedicated timesheet software at a reasonable per-user price. The best of these are based in the Cloud, come with a mobile app for remote employees (that includes a GPS-based mileage module), permit on-line approvals, and talk seamlessly to Quickbooks.

5.3b Do you have clear policies around expenses and mileage?

Yes

5.3b C User Comments

5.3b W You do not have documented policies in place for expense and mileage claims.

5.3b R Set and document policies around expenses and mileage. These should guidelines, not dictates: tight enough that employees understand what is expected of them, but not so detailed as to be impossible to follow or to encourage “gaming” the rules to increase payouts.

5.2 Have you reviewed your suppliers in order to reduce their number, and then negotiate preferred supplier (i.e. volume discount) agreements with the remainder?

Yes

5.4 C User Comments

5.4 W You have not reviewed your suppliers in order to reduce their number/ negotiate preferred supplier (i.e. volume discount) agreements with the remainder.

5.4 R Streamline your vendor list, and push for volume discounts with the winners. Consider costs in conjunction with their reliability, responsiveness, and flexibility. Do the math to confirm whether two vendors (lower rates from 8am-6pm, higher rates for after-hours) are cheaper than one offering 24-hour service at premium rates.

6.1 Do you regularly examine your existing customer list (and/ or segments) to identify ways to sell your other products?

Yes

6.1C User Comments

6.1W You do not regularly examine your existing customers/ segments) to identify ways to sell your other products.

6.1R It is far cheaper and easier to sell additional work to your existing clients, rather than trying to find new ones from scratch. Take time for this once per quarter – ideally, when you are revising your sales forecasts. First, think about your clients’ needs, talk to some of them to evaluate your thoughts, and then develop a plan to fill those needs.

6.2 Do you maintain a standard price list?

Yes

6.2 C User Comments

6.2W You do not maintain a standard price list.

6.2R Have a standard price list, whether it is an hourly rate by employee or your own version of an MSRP. The price list gives clarity to you and your salespeople: at the very least, you know your break-even before you start offering any discounts.

6.3 Have you worked out the effect of any potential discounts on your profits?

Yes

6.3 C User Comments

6.3W You haven’t explicitly calculated the impact of offering discounts on your profits.

6.3R Avoid offering sales discounts - they cut into your gross margin, and you’ll have to get a lot more sales than you first thought to make up for the discount. The effect on the bottom line gets bigger – i.e. worse - if your margins are lower. Instead of offering “pure” discounts, offer volume discounts, but only after you’ve done the math. And, if you _do_ offer discounts, set up a separate GL account for them, so you can track how much you’re knocking off your standard prices to win business.

6.4 Does someone other than the estimator review any estimates, or approve against the price list as appropriate?

Yes

6.4 C User Comments

6.4W You don’t require independent signoff on estimates.

6.4R Require someone independent of sales to sign off estimates. Losing jobs that are accidentally overpriced is bad enough, but losing your shirt on an underpriced bid is worse. Document and implement delegation and approval levels if you can. Two junior estimators could sign off each other’s work up to $10,000, but amounts beyond that require more senior review. This covers off the risk and as an added benefit reduces the time you spend on administration.

6.5 Do you compensate your salespeople based on the products’ gross margin (i.e. as opposed to the sales prices)?

Yes

6.5 C User Comments

6.5W You pay commissions on something other than the product’s gross margin.

6.5R Compensate your salespeople based on big profits (the “contribution margin”, i.e. gross margin before any overhead allocations) not the big dollars (the sales price). Revenue is vanity; profit is sanity. (And Cash remains king.) A flat percentage of sales is administratively easy, but that tells the salespeople that you are vain (revenues) not sane (profits). We can help you work out a commission structure that is administratively simple, that meets your sales objectives (including profit maximization), and does not give away any confidential information.

6.6 Do you adjust sales compensation based on customers’ payment terms/ experience?

Yes

6.6 C User Comments

6.6W You do not adjust sales compensation based on customers’ payment history.

6.6R Consider adjusting sales compensation, perhaps as bonuses, based on customers’ payment experience. Your business benefits when your customers pay promptly, so you should encourage your salespeople to do business with those customers.

Thank You!

Before you submit:

You have analysed your cash flows and financial processes!

Your completed questionnaire should arrive in your inbox in a few minutes.

We will follow up in a few days in case you have any questions.

Please contact us at any time at [email protected].

Many thanks!

Server Side Error

We faced problems while connecting to the server or receiving data from the server. Please wait for a few seconds and try again.

If the problem persists, then check your internet connectivity. If all other sites open fine, then please contact the administrator of this website with the following information.

TextStatus: undefined
HTTP Error: undefined

...

Processing your request

Error

Some error has occured.

Form successfully restored

Contact Details

The more of the sections below you fill out, the better we can help you.

Company Information

Management Information Systems

Anything else you would like to tell us about your business. For example:

Rich Text D98

You have analysed your cash flows and financial processes!

Server Side Error

Error