By Rich Bond
There is a simple “canary in the coal mine” financial indicator that private businesses and nonprofits can use to see if their organization is at risk of being blindsided by real trouble.
It’s this: How fast does your financial person close the books?
If it takes more than 10 days to close the books, your finance person is essentially a bookkeeper. This is a situation that is putting your entire business at a big risk.
But if your business closes the books in 10 days or less, then your finance organization has time to do cash forecasts.
When your company forecasts cash flow, you can proactively manage potential shortfalls. You are in an infinitely stronger position, if you can go to your bank 90 days before you run out of cash, rather than when it suddenly happens.
Please reach out to me if you want to talk about how your finance function can reduce risk and improve overall performance.