This is the first in a series of blog posts on the topic of the key metrics we used at Compuquip to manage our MSP business.
My father used to have a t-shirt that he wore all the time that said “Happiness is a Positive Cash Flow” and the key chain that had his office keys said “Cash is King”. So I guess you can say that managing cash has been instilled in me since I was very young.
Cash is the lifeblood of any business. If you have no cash, you have no business; simple as that. Cash is an important metric that needs to be monitored regularly. Every day I monitor the cash on hand across all of our accounts across all of the Dosal Capital operating companies. Every morning by 11:00am I get a detailed breakdown of the cash balance in our accounts. I realize not everyone can have someone else run the report, but at a minimum you should be checking it daily to make sure nothing is off.
Another safeguard to keep an eye on cash, is signing all the checks yourself. Every single check produced by our companies is signed by me or my brother, regardless of the size. We have some that are less than $10 and others that are over $1,000,000. It’s a great way to keep an eye on the flow of cash out of your business and make sure everything is accurate.
I strongly urge every business owner, MSP or not, to keep a close eye on cash because of how vital it is. During times that we thought cash may be a little tight we moved to weekly cash projection reports that our team would prepare. This would factor in what receivables we expect to collect in the next week or two and what checks needed to be cut.
This ties in very nicely to our next blog post about Invoice Management, specifically Invoices Over 60 Days Past Due.
This blog is part of our Internal Metrics That Matter For MSPs blog series that you can download here: Download White Paper
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