Monthly Financials Are Not Enough for a Business Owner

Cash flow is the heartbeat of your business, yet most entrepreneurs are flying blind when it comes to understanding what’s happening with their money. Actually, clients don’t even know to ask us this – but we typically try to sell our clients some form of cash flow reporting (and there are great tools to do this for our clients!).

We do want our clients reviewing their financials monthly (in a summarized format) but monthly statements only tell you what already happened. That’s not bad, it just gives you the patterns of how you’ve been operating. Cash flow reporting is always looking forward, typically 30, 60, 90 days out. We’ve all heard cash flow is like blood pumping through your company, and our clients need to visually see what the flow is of their cash in their business.

When we’re selling to clients, they often say “I just don’t know what I don’t know” or “what am I not seeing?” – we can usually solve these fears with some form of cash flow reporting. It gives insights to the client, calms them down, and then they can start making decisions with data, not only with their gut.

The Three Financial Reporting Timelines That Matter

Think of the reporting you need in 3 phases:

Historical reporting covers what already happened—your traditional profit and loss statements and balance sheets. It’s completely accurate with zero risk, and perfect for tax prep and compliance.

Present timeline forecasting covers the next 90 days to 6 months. This is your cash flow sweet spot I’m talking about—far enough out to make meaningful decisions, close enough to be highly accurate. This is where you manage seasonal fluctuations, plan major purchases, and avoid cash crunches (or when to dip into your line of credit).

Strategic timeline planning extends 6 months to 2 years out. This is less precise but still valuable for expansion conversations and/or hiring decisions (and other big initiative spending you need to think through more deeply).

Business owners care about cash flow, but a small business owner just doesn’t know how to do it. But we do, and that’s why firms like ours exists. Historical data is very good, but you’ll also want to look ahead on a short term basis too.

We try to offer cash flow reporting services to our clients on a weekly basis. You can look at historical financials on a monthly basis, but when you are looking ahead for 30, 60, 90 days then you want to do that in a shorter rhythm.

If you’re a super nerd, I wrote a book on becoming a cash flow advisor for accountants – small business owners may enjoy it too: https://relayfi.com/blog/ebook-becoming-a-cash-flow-advisor

What’s your biggest cash flow challenge right now? Are you dealing with short-term visibility issues or long-term planning concerns (we all deal with both off those from time to time). I’ll see if I can offer some help on issues you might be facing. And feel free to message me on Li privately if you want too.”