Cash flow tips from top-performing CFOs

Every CFO knows that cash is king! So give your company’s coffers the royal treatment with these top cash flow tips.

Cash flow tips for CFOs

Your cash flow forecast will be the life force of your future business strategy. And as your company grows, you’re likely taking on more debt or wracking up expenses—making it more challenging to get additional financing.

Don’t get backed into a cash flow corner. Here are some great cash flow tips from five CFOs that have been there before and their advice on cash flow management.

1. Prepare cash flow projections

Jonathan Gass – Founder & CEO – Nomad Financial

“A well-run business should build a 13-week cash flow forecast that takes into account the exact week in which a payment is expected to be either received or sent out. It gives management the ability to understand their cash needs over the next quarter and make smart decisions about how to manage their working capital and when to make active decisions to stretch it out.”

2. Manage cash flow with separate accounts

Jody Grunden – CFO – Summit CPA Group

“Most small businesses manage cash flow by looking at one master bank account. With just one account, it can be hard to stow money away for taxes or for other projected expenses. It can also be hard to understand the health of your cash flow on a regular basis. What I’ve found to work well is to have three separate accounts, each with a different purpose.”

Gain better control over your cash flow by using an operating cash account for everyday expenses, a cash reserve account for emergencies and a tax reserve account to ensure you have enough money to pay the taxman at the end of the year.


3. Allocate resources strategically

Brad Halverson, CFO of Caterpillar

“An important responsibility of a CFO is resource allocation — where the company is investing its time and money. To do this well, the CFO needs to first get their hands dirty in the field by gaining an understanding of where and how the company is positioned to compete for business by adding value to customers.”

4. Benchmark operations

Ken Goldman, CFO of Yahoo

“For a number of years, we benchmarked best practices. By tapping into both internal and external knowledge, we were able to better map accounting and transactional functions and measure their competitiveness and effectiveness across operations. Benchmarking every operation allowed us to compare and analyze so we could align our structure over time.”

5. Improve cash flow management

Eliana Salazar – CFO of AWE

“These four steps will help you improve your cash flow: ask for the longest payment terms possible, monitor the account receivables, consider alternative terms of financing, and constant negotiations with your suppliers and contractors.”

Bonus cash flow tip:

Know how to communicate the numbers

Carol Tomé, former CFO of Home Depot

« It’s one thing to know your numbers, but it’s another to make sure your teams, including fellow C-levels, the Board and investors, pay attention to the right ones.

During my first presentation to investors as Home Depot’s CFO, an investor on the front row fell asleep. He wasn’t fighting nodding off… he didn’t close his eyes for just a second… he didn’t have a glazed look in his eyes. He fell asleep and fell off his chair.

After that, I understood immediately that you can know the numbers and the strategies behind them better than anyone, but if you can’t communicate well and tell your company’s story in a way that engages the investor and analyst community, you are toast.

I vowed from that moment on to become a master of connecting with my audience, and it’s something I push my direct reports to do as well. »


Up Next: Ready to put these cash flow tips into action? Use these 7 proven cash flow tactics to manage your cash flow.

At Liquid Capital, we understand what it takes for small, medium, and emerging mid-market businesses to succeed – because we’re business people ourselves. Our company is built on a network of locally owned and operated Principal Offices, so whenever you’re talking to Liquid Capital, you’re talking directly to your funding source and a fellow business person.