The Smart Cash Flow Programme

From 25 years of owning and operating small companies (and some large ones too), one of the hidden costs of doing business has always been our bank charges, fees and, of course: the lending/borrowing interest rate charges.  These can be prohibitively expensive so we devised a simple smart cash flow programme to ensure we kept bank fees, charges, lending rates and ‘one-time’ management fees (let’s call all of these Hidden Bank Charges) to the absolute minimum.

As most micro-medium business owners will understand, trying to negotiate reduced bank fees and rates is largely a waste of time.  Given the current banking situation, most business owners are too scared to even call their bank, let alone try to negotiate a reduction in any Hidden Bank Charges.  Keeping this in mind we went about developing a smart cash flow methodology with a simple set of procedures to improve our cash position.

This blog covers all the smart cash flow ‘tricks’ we developed and over the next few weeks it will provide an entire programme that your credit control people (i.e. the people in your company that collect cash from the people and organisations that owe you money) can easily adopt.  Most importantly, we don’t move the costs around from one area (the bank) and ‘jack up’ the workload on another (your people).

As its name suggests, this is a smart cash flow programme that uses technology to reduce the workload whilst improving cash collections and maintain the key objective of reducing Hidden Bank Charges and DSO. Before setting out the programme, let’s first understand some of the basic terminology used in credit control and also look at some of the language used on the dreaded bank statement where most of the Hidden Bank Charges can be found (not all bank charges are clearly identifiable from the bank statement… more on this later…).