Jun 18, 2023·6 min read

How to Make a Meaningful Cash Flow Impact As an Advisor

by Matt DarnerVP, Business Dev. | Co-founder

Taking on the role of an advisor means being able to shape your client’s businesses for a better future. But just like other important roles, it isn’t always an easy role to fill.

Oftentimes being an advisor means being the bearer of bad news. It’s your responsibility to point out where things aren’t going well and potentially provide a harsh dose of reality. But the conversation should not end there. The real value comes from turning the insights into action.

If you can make a meaningful impact on the cash flow of your clients, you will become an invaluable resource to your clients – well worth the cost of your services.

We’ve got the keys that help you get there.

Being more than bad news

While business owners might say they want cash flow advice, what they’re really looking for are cash flow solutions.

Generally speaking, nobody wants to hear all of the ways they’re failing at managing their cash flow. They already know. Most often they are looking for advice because they know something isn’t working for them.

When discussing cash flow with clients, it is best to be focused on providing context for the solutions. Remember, it’s not just the analysis you provide on what happened, it’s the ways you shape their behavior with tangible action that makes your services valuable.

Options for creating an impact

Make suggestions on a forecast

Cash flow forecasting is a great way to illustrate how small changes have big impacts. Take the time to forecast the results of their current situation that include their standard and planned expenses. This allows you to show when and why their business might be in a cash deficit before it is a cash emergency.

Review the results with clients. Take the opportunity to make adjustments to the numbers given the information they bring to the table. Most important – show the impact of any changes on the end result. No matter what the solution is, big or small, each choice plays into the overall cash flow picture.

Outline consolidating debt

For the business that relies on credit cards, loans, lines of credits, and any other informal IOUs, debt consolidation is key.

When a business carries a lot of debt, it isn’t just the accruing interest that’s the problem. Having to plan for and make multiple monthly payments can make cash flow complicated. If a business has to account for five different monthly payments, that’s five disruptions to their cash flow they need to absorb somehow.

Consolidating debt isn’t the perfect solution. After all, if a business is struggling to manage its debts, it might be hard to find another creditor willing to provide a consolidated solution. But if the option is available, a single, consistent monthly payment is easier to prepare for and makes a business’s cash flow more predictable.

Perform an expense analysis

Business owners often juggle so many tasks that they don’t take the time to evaluate and review their own expenses and other cash outflows. The longer it takes to be critical of outflows, the more they start to become invisible, feel necessary or read as “just business as usual.”

It’s important to provide firm guidance and a critical eye for your clients. Your perspective as an outsider to the business is key. Go through the recurring expenses and challenge them on whether each item is the most cost effective approach or even necessary at all.

You can go above and beyond when breaking down a client’s expenses by talking about the timing of outflows. This is an aspect of cash flow that many business owners forget when looking at their monthly activity.

Suggesting that clients explore renegotiating recurring payments so they’re spaced out through the month might be just the cash flow room they need. This could mean anything from changing the payroll cadence to moving a rent payment, or even renegotiating a lease so the expenses are evenly spread throughout the year. If the business has revenue trends, moving one-time expenses to correspond to these increases in available cash can change cash flow significantly.

Promote better invoicing habits

The sooner they invoice, the sooner they get paid. If your client waits to do invoices in batches, they are extending the duration of time it takes to get that money in their bank account.

To illustrate how their invoicing practices contribute to cash flow issues, go through their list of clients and get a rundown on how long it takes for each client to pay after receiving an invoice. If this is the window in which they expect to get paid, they can invoice early enough to try and get paid by the time they need it.

In addition, ask about their follow up strategy with clients. Nobody likes to pester people with payment reminders, but for so many customers an invoice can become out of sight, out of mind. Sometimes all it takes is that small push to ensure they get paid before facing cash flow problems.

Chasing aged accounts receivable

Too frequently business owners treat uncollected payments as a loss before trying out a different approach. Or maybe they’re so focused on making that next sale that they aren’t thinking about collecting on their past invoices.

If you can somehow turn this uncollected revenue into money in their account, you’re making a real dollars and cents difference for your clients. And there’s a solution to this problem that’s easier than you think.

Providing A/R services used to look like having members of your team spend their precious time chasing down delinquent clients. But with CollBox, you have a hands off solution that gets your clients paid and gives valuable insights into their client payment trends.

CollBox works by putting past-due invoice follow up on autopilot for your clients. For one low monthly fee, CollBox provides automated email reminders, resending of invoices, and, critically, real, human phone call from their team of A/R Specialists so client’s customers receive timely, friendly, follow up on a consistent basis – freeing up your client (and your firm!) to focus on doing what they do best – growing their business.

For a truly hands free source of revenue, consider CollBox’s partnership program. For each CollBox-connected client, you get a percentage of the subscription while your clients enjoy getting their invoices paid. Get started today.

Share this post:

Start collecting on your past-due invoices today

From gentle follow-up to collections, CollBox is the simple A/R solution for businesses with slow and non-paying customers.