Liquidity – will we have enough cash next month?

Bank account below zero, never again.

__________

PROJECT

Financial range

KPQ

How can we efficiently oversee our cash flows?

BUDGET

3 days

DATA SOURCES

Dynamics Business Central, Bouwsoft, Excel

Liquidity is an important issue on entrepreneurs' agendas, first there was corona, now we have problems with inflation. You just sleep better when your business has sufficient liquidity.

“Most entrepreneurs make the mistake of focusing only on their product. Don't do that. Your banker is not interested in your product. He is interested in your finances, so you should be too.” Gerald Hörhan

1. Open the dashboard once a week

This dashboard consists of a sequence of reports, the user goes through them in chronological order. We start our analysis on the “Financial Range” page. The financial range is a KPI that indicates how many months you could survive if sales fell to 0 tomorrow (think corona).

The KPI is an important indicator for the cash position and the financial health of the company. We have determined that we can survive for 4.5 months (see tacho). We would like to increase this to 6 months, in order to sleep better.

2. Profit overview

The goal is to increase the cash position and raise the KPI to 6 months. For this we need to increase the profit to 20% of the turnover. We assume that sales cannot be increased in the short term. We will therefore have to reduce costs. The dashboard shows a dynamic roadmap with your own data. 

3. Strategy

So the strategy is to control costs. We need a monthly profit of 13K to replenish our cash position. For this we will need to save 10K per month as shown on the bottom left. On the right side of the dashboard you can see the forecasts for the profit and the costs.

4. Deep dive in the costs, where do we need to cut?

In the middle we see the current state of the costs as well as the desired situation. The costs will have to decrease by € 9810 per month. Below, we see the evolution and distribution of costs over time.

On the right, we see in detail where savings have to be made and where more costs could possibly be incurred. The entrepreneur uses this to improve his cash position. 

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