The absolutely most important asset of any business is cash and near cash items. Near cash items generally include accounts receivable and inventory. The first step following the completion of an agreement to perform a consulting engagement is to complete a snapshot of the current cash and liquidity position as well as the near term forecast of cash and liquidity positions. Near term is defined as eight weeks.

The forecast is updated weekly with one week dropping off and one week added. The resulting schedules are named the eight week rolling cash flow and financial flash. This report is a foundation tool for the business. It tells management whether the business is strengthening or weakening in the near term and it reports on the impact of management decisions designed to improve the business. When can you stop doing this? Never!

All the best,

Steve Pohlit, President

Exec Net Consulting

The Profit System