{"id":383,"date":"2013-09-09T22:28:10","date_gmt":"2013-09-10T02:28:10","guid":{"rendered":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/?p=383"},"modified":"2013-09-09T22:36:18","modified_gmt":"2013-09-10T02:36:18","slug":"janitorial-cash-flow","status":"publish","type":"post","link":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/janitorial-cash-flow\/","title":{"rendered":"Janitorial Cash Flow – Top Ten Tips!"},"content":{"rendered":"

The definition of Cash Flow is \u201cThe excess of cash revenues over cash outlays in a given period of time, not including non-cash expenses.\u201d In layman\u2019s terms, it simply means not only having more cash coming in than going out, but having that \u201cexcess\u201d cash coming in when you need it!<\/p>\n

For example, if you have $10,000 in revenue coming to you on the 20th<\/sup> of the month and $8,000 due in payables on the 15th<\/sup>, including payroll, what do you do? Do you simply tell\u00a0 your vendors and employees, \u201cdon\u2019t worry, you\u2019ll get paid when I get paid\u201d and expect them to be understanding? Sure, you\u2019ll have a few understanding people, but DO NOT rely on people understanding your cash flow issues! Instead, take the time to create a cash flow system to eliminate the inevitable problems that come from paying late, i.e., employees quitting, vendor credit cut offs, bank overdraft fees, poor relations, credit score reductions and the list goes on and on.<\/p>\n

If you\u2019ve got bank lines of credit and can pay all you\u2019re bills on the first of the month, that\u2019s great and I\u2019m happy for you, but I can bet that in the beginning you had to be very savvy with your cash flow to convince the banks to lend to you. Kudos and respect to you! But , remember, borrowed money is the most expensive money.<\/p>\n

Let me just touch on my Top Ten free, time tested Cash Flow Tips that have served me well in 25 years in this great janitorial industry. Remember, it\u2019s all about having actual cash on hand when you need it! It\u2019s not easy, but it\u2019s not hard, just have a plan!<\/p>\n

    \n
  1. ESTABLISH CUSTOMER TERMS:<\/strong> DO NOT start an account and not know when you\u2019ll get paid. My written terms were always billed on the 1st<\/sup> of the month, due on the 15th<\/sup> of the current month for the whole month. If they couldn\u2019t do that, I\u2019d bill them 2x per month, the 1st<\/sup>– 15th<\/sup> due on the 15th<\/sup> and the 16th<\/sup> -30\/31st<\/sup> due on the 30th<\/sup>. Hear me, establish terms!<\/li>\n
  2. ESTABLISH VENDOR TERMS:<\/strong> Once you\u2019ve established terms with your customers, get with your vendors. If you know that customer payments come in on the 15th<\/sup> and 30th<\/sup> of each month, then set up payments with suppliers due on the 16th<\/sup> and 1st<\/sup> of each month with your vendors. Vendors WILL WORK WITH YOU if they simply know they can count on a payment date. Car payments , cell phones, suppliers, even rent landlords can all change due dates for you.<\/li>\n
  3. ESTABLISH COMPANY BUDGETS:<\/strong> Know exactly what your numbers are. What\u2019s your total monthly revenue and expenses each month? When are payments coming in and when are bills due?<\/li>\n
  4. ESTABLISH A PERSONAL BUDGET:<\/strong> It\u2019s true that \u201c the eye is never satisfied\u201d, but have the discipline and restraint to live within your means.<\/li>\n
  5. INCREASE REVENUE:<\/strong> No brainer, new customers equal more $Revenue. Continually be looking for more customers and have multiple bids out at the same time!<\/li>\n
  6. REDUCE OVERHEAD and INVENTORY:<\/strong> A $2000 a month office requires $7-10,000 a month in revenue to pay for it. I\u2019m not saying don\u2019t have one, but customers don\u2019t come to your office, so make sure it\u2019s a \u201cneed\u201d to have and not a \u201cnice\u201d to have. Work from a home office until it\u2019s impossible any longer . Also, have a \u201djust in time\u201d inventory on hand in your warehouse. Don\u2019t have $1000 in floor wax on hand if you only use $200 a month. Use the other $800 to pay bills.<\/li>\n
  7. DON\u2019T FINANCE IT:<\/strong> Don\u2019t finance a $4,000 new floor autoscrubber for 24 monthly payments and a total pay out of $5800, if you can buy a used one for $1500 cash that does the same job! Use your head!<\/li>\n
  8. EDUCATE YOURSELF:<\/strong> Do internet searches on cash flow tips, read books on it, read blogs on it, then implement it!<\/li>\n
  9. SUPERVISORY EMPLOYEES MUST PRODUCE REVENUE!:<\/strong> Make sure all supervisors, managers, etc., are producing monthly revenue! They should be filling in, cleaning buildings, delivering supplies, training new employees, solving problems, keeping costs down, etc. ! They should be the hardest working and most productive employees in your organization!<\/li>\n
  10. REVIEW IT:<\/strong> Review your cash flow daily, weekly, monthly and make adjustments accordingly! Do it this month and the next and next and so on. BE DISCIPLINED FOR CASH FLOW SUCCESS!<\/li>\n<\/ol>\n

     <\/p>\n

    Follow these simple guidelines and watch your Cash Flow in the right direction and most important, when you need it!<\/strong>
    \n\"CleanGuidePro\"Drake\"<\/p>\n","protected":false},"excerpt":{"rendered":"

    The definition of Cash Flow is \u201cThe excess of cash revenues over cash outlays in a given period of time, not including non-cash expenses.\u201d In layman\u2019s terms, it simply means not only having more cash coming in than going out, but having that \u201cexcess\u201d cash coming in when you need it! For example, if you … Continue reading “Janitorial Cash Flow – Top Ten Tips!”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[22],"tags":[6,23,66,9,7],"_links":{"self":[{"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/posts\/383"}],"collection":[{"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/comments?post=383"}],"version-history":[{"count":21,"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/posts\/383\/revisions"}],"predecessor-version":[{"id":408,"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/posts\/383\/revisions\/408"}],"wp:attachment":[{"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/media?parent=383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/categories?post=383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cleanlyrun.com\/wpDrakeBlog\/wp-json\/wp\/v2\/tags?post=383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}