What’s the ideal agenda for a weekly cash flow meeting? Check out this episode to find out.
We are back on cash. Last episode, we spoke about the ideal format for a weekly cash flow forecast. Today, we’re going to talk about how you use that cash flow forecast in conjunction with weekly cash flow meetings, which ensure that you are managing your cash properly. How long should a cash flow meeting take? About 20 to 25 minutes. Your cash flow forecast would need to have been updated a day or two before, and then you want to have that to hand in your weekly cash flow meeting.
So, what is the ideal agenda for this cash flow meeting? First of all, where are the surprises? You should start with elements of the agenda such as actual versus forecast. Last week, you would have forecasted what was coming in and what was going out, and the thing that you want to try and understand is: Were there any surprises in terms of things going out that you hadn’t anticipated? If so, why? What are the lessons, and what can you do to prevent that from happening again? If money has come in that you weren’t expecting, high fives and celebrations – great news. No one minds that.
Next up, what is the overall debtors amount? Is that a problem? Is it really high? Do you need to do anything about it, and do you have any escalations? Are there any customers that need to go on stop, or any customers that are at risk of going on and need to be dealt with by other team members in your business?
Next, creditors. What is the payment run? Now, if cash is tight, you might want to keep a close eye on this. If it’s not so tight, then your finance function is probably free to understand what should be on their payment run themselves, but you may want to look it over, and this is your opportunity.
Next up, what is the short-term cash flow outlook? What you want to try and understand is if there are any risks, issues, or gaps over the next two to four weeks. If there are, what are you going to do about it? Next is the long-term outlook. Over the next 5 to 13 weeks, do we have any gaps, do we have any issues, do we have any risks? If so, what do we need to do about it? At this stage, you might want your forecasts from sales and operations to ensure that you’ve got sufficient activity going on to plug the gaps. And if you don’t have sufficient activity to plug those gaps, now’s the time to have that conversation.
Next, you want to end with “Who is going to do what by when?” This meeting should end in actions, and those actions need to be documented. That way, when you get to the next cash flow meeting, you can check over those actions, make sure they’ve been done, and then just cycle back into the agenda that I’ve shared with you.
Cash flow is about discipline, and it doesn’t matter how good your cash is getting or how much reserves you’re building up. In my view, it is so important to be on top of this. People only ever pull out the cash flow forecast and get the cash flow meetings up and running again when they are in trouble. If you want to avoid that from happening in the first place, get this in place, stick with it, and if you’re done in eight minutes, Happy Days – you can crack on with the rest of your day.
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