Cash Flow Mistake #3 - "It Must Be Perfect."

I know a new client has fallen for this mistake when they hand me a multi-page, color coded, 40-category Cash Flow Projection spreadsheet.  And it's dated 3 years ago.

In an effort to "do it right," we try to create financial reports that are completely accurate and perfect.  Everything according to Fortune-500 accounting principles, highly detailed notes, extensive competitor research, and sub-part after sub-category.  But what happens?

These beautiful spreadsheets gets stuck in a drawer, never to be used again.  What a colossal waste of your time! 

Here's the Truth:  Simple is powerful. You need short, summarized financial reporting that you can actually use!  You can use two simple one-page spreadsheets to troubleshoot income problems before they start and make powerful planning decisions for the future of your business. 

These two spreadsheets are Marketing & Sales Weekly Report (statistics tracking your sales process and how you generate income) and Monthly Cash Flow Projections (projected income and budgeted expenses).

By the way, perfection is impossible.  When you are projecting the income or budgeting the expenses of your business, you are trying to predict the future.  It's an educated guess.  Your projections will never be perfect — but all you need is information just "good enough" to help you create and make changes to your business & marketing plans. 

Trying to predict weekly Cash Flow?  If you are trying to micro-manage weekly Cash Flow Projections, that's a sign you need short-term financing, such as a business Line of Credit or even a traditional American Express card. 

(part 4 coming next week)