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CEO Tools Blog

Feb 2012 - 12 Seasons: Covert Cash in Your Business!

February's 12 Seasons drills down into cash management with tools you can introduce into your business to accelerate incoming cash, slow outgoing cash, and find cash you didn't know was there!  Delegate these tools to those managers and employees who can do the best with them.

An example of "hidden" cash is printing companies that keep leftover printing paper in short resizing or cutting  that paper into smaller sizes that fit smaller printing presses, we get twice as much paper that can be sold to a smaller-format printing business.  Another approach is to look at a detailed balance sheet (yes, to the penny)...we found a half-million-dollar stock certificate that had been forgotten in a Fortune 500 company this way and recapturable deposits in several smaller businesses this way.

Here are more tools for speeding cash inflows and slowing cash outflows:

1. As Red Scott says, Cash ain’t cash unless it’s cash!  (manage cash and credit SEPARATELY)  
2. Maybe borrow-down some credit & put it in CDs (to have a reserve of cash)  
3. Review all expenses, item by item, and cut…cut quarterly  
4. Have an all-hands meeting to work on cash (weekly, stand-up, 15-minute)  
5. Start collecting before mailing invoices, not in 30 days  
6. Watch like an eagle the over 60-90-120 DSO (they're skyrocketing as % of total)  
7. Use sophisticated asset/cash tools like Earn-&-Turn & Segmented Collections  
8. Re-forecast cash out 16 weeks every week, have and use a daily report  
9. Try 1%-10 Rebate not Prompt Pay; and COD + 10% or even 20%  
10. See more tools and tips on cash at

Please also see the original "Top 10 Cash Management Tools" below...these are still loaded with opportunities for finding more money right now.

By mining employees' and suppliers' activities as well as hidden locations of cash in your company, we're hoping you find more $$$ than you ever thought possible!  If just one of the ideas provided here works for you, we'll have accomplished our goal.

Here's to more cash, Kraig

Top 10 Tools for Managing Tough Cash Situations and for Staying Out of Cash Trouble!

1. SHORE UP CAPITAL (both equity and debt) – this means leaving equity in the company as you grow so that borrowings can grow as well without increasing the debt:equity ratio.  If already in cash trouble, bring in outside equity.  Preventive: leave enough equity in as you grow profitably to maintain a healthy debt:equity ratio for your industry.

2. TRACK CASH DAILY & RE-FORECAST WEEKLY – so can meter the cash outflow (payments to suppliers) as well as encourage cash inflow (payments from customers) and balance borrowings appropriately.  Yes, CEOs, CFOs, and GMs need to see a daily cash report to stay on top of this, both for preventive and emergency cash management.  The re-forecast out six-eight weeks helps you see the future!  See Kraig’s easy Cash Manager Tool.

3. HAVE AN ALL-HANDS CASH MEETING WEEKLY – with everyone in the business who has a direct impact on cash, whether incoming cash (receipts or collections) and outgoing (disbursements to suppliers and employees).  This is a 15-minute standup meeting without chairs but with agenda to guide discussion.

4. FIND CASH BY SEEING WHERE “C-H-I-P-S” ARE HIDING – Cash Hides in Peculiar Spots, so find ways to see it.  Getting an outsider to walk through your business and ask questions like “what are those small stacks of paper” in a printing company led to selling all that paper (that would never be used) for 100’s of thousands of cash dollars!

\5. STAY CLOSE TO LENDERS & PROSPECTIVE INVESTORS long before you need them.  Whether preventively or emergency, to get cash when you need it you must have prior happy relationships with those who will provide the cash timely when you really need it.

6. GROWTH GOBBLES CASH FOR BREAKFAST – you might not make it through the day!  So understand your growth rate.  Don’t grow too fast – determine your “right growth rate” by seeing pages 126-128 of Kraig’s book “CEO Tools…for Every Manager’s Success” and then use the What Causes Sales tool from to grow at that sales growth rate.  You’ll maximize profitability while staying out of cash trouble forever!

7. CONTINUE TO LEARN ABOUT CASH – by reading and networking on the subject.  One book Kraig likes is Barry Schimel’s “101 Ways to Prosper in Today’s Economy.”  And, become a cash student for life by continuing to study the things that have driven your company and others into cash paroxysms in the past and things that make cash plentiful!

8. BREAK THE CHECK-SIGNER’S ARM! – And then sign the checks yourself as CEO or GM for a while. This will help you REALLY understand where the cash is going and who in your company is spending it.  Many CEO’s and CFOs do this once a year on a surprise basis for a month just to refresh themselves on what is happening in their company from a different viewpoint.

9. REMEMBER, OWNING 40% OF A SUCCESS IS FAR BETTER THAN 100% OF A FAILURE! – Too many entrepreneurs and control-types have hung onto 100% ownership right into Chapter 7 and 11!  Be willing to bring in equity investors of all types, selectively.  You can control your business 100% with only 1% actual ownership yourself using an LLLP or ESOP as your form of corporate legal organization.

10. BECOME A "CASH STUDENT" for life…keep on learning cash tools, even though in more mundane areas like the collection function in your company.