Article Link: http://exchangepress.com/article/cash-flow-oh-no!/5022870/
Oh, yes! That little reminder that I’ve got to pay the bills and there are too many days left in the month. Keeping the lights on is a major issue for every center, regardless of the quality of the program. In fact, I’ve seen more centers fail due to their inability to put their arms around their cash flow than in having an inferior product. Somewhere, someone needs to ‘count the beans.’
So what exactly is cash flow? Almost everyone budgets in some fashion or another, even if it’s of the most rudimentary fashion (hopefully beyond a few numbers on a cocktail napkin). Many people get confused with cash flow and revenue numbers, which often show money owed or money hopefully on its way (subsidy dollars and accounts receivable). Budget planning is necessary, but cash flow planning is imperative in order to keep the center running. So, simply stated, what is cash flow? It’s how much actual cash your center has on hand every day of the year. Annual budgeting should include reasonably accurate projections on what that cash flow should look like and the ability to make changes as the weeks and months progress.
I once had a director tell me that ...