Black Ink Cashflow Secrets Your Accountant Never Shared By Tom Shay

Tom Shay, CSP Certified Speaking Professional

Business Success Rate
Start 100 businesses today,
Only five will still be in business in five years.
Only two will still be in business in ten years.
Of those that fail, 54% have a profitable income statement.
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In our time today,
We are not:
Eliminating your accountant.
Learning a new way of accounting.
We are:
Developing a great management tool.
Planning for a great future.
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Background material:
Profit & Loss Statement:
Also known as Income Statement
What you did in the last 30 days
Sales at top, expenses at bottom
Does not include principal payments
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Balance Sheet:
What you own, and what you owe
Changes monthly as you post a profit or loss, sell or buy assets
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Background material: www.profitsplus.org
Cash basis accounting means all income and expenses affect the P&L statement in the month in which they actually occur.
Accrual accounting means sizeable incomes and expenses are divided to affect the P&L statement over several months.

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Cash basis example
Bi weekly pay –
10 months with 2 payrolls
2 months with 3 payrolls
If payroll is $6,000 bi-weekly,
10 months report $12,000 and
2 months report $18,000
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Accrual basis example
Instead of 10 months at $12,000 and 2 months at $18,000
Now each month reports $13,000 in payroll
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What could you accrue?
Payroll
Payroll taxes
Rent overage
Insurance
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Property taxes
Outside services
Income taxes
Office & store supplies

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Cashflow is:
The tracking of all of the changes to the financial position of your business, updated with each new financial statement.
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Cashflow is:
Beginning cash
Profit or loss
Changes in receivables
Changes in payables
Changes in equipment
Changes in inventory
Ending cash
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www.profitsplus.org Column B: C & P

www.profitsplus.org Column B: P/C

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What can this info do?
What if you could increase your margin by 3/10%?
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www.profitsplus.org Original Margin

www.profitsplus.org With Increased Margin

What can this info do?
What if you were able to eliminate $100 in expenses each month?
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www.profitsplus.org Dollars or Days – Profit

www.profitsplus.org Accrual method

Accrual basis cash flow
The P&L Statement – page 11
The cashflow chart – page 12
Accounts receivable – page 13 Purchases and dating Inventory
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How does this make money?
Project sales
Anticipate expenses
Plan for maintenance
Design your accounts receivable
Know how much to order
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How does this make money?
Know if you need to unload inventory
Plan for trade shows
Utilize dating orders
Foresee cash shortages
Run your business, not let it run you!
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To fully utilize EZ Cashflow
Complete your financials ASAP
Update each month
Look at all ending cash balances
Try “what if” scenarios
Call with questions
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The road to success is not doing one thing 100 percent better, but doing 100 things one percent better. www.profitsplus.org

Final Note www.profitsplus.org
This presentation will be specialized to your industry and your attendees’ specific needs.
For more information about having Tom present for you, contact us at (727)464-2182 or visit our website: www.profitsplus.org

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Black Ink Cashflow Secrets Your Accountant Never Shared By Tom Shay

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