CashFlow ABC

The Statement of Cash Flow is the evolution of the Statement of Changes in Financial Position. It is a highly useful tool within the guidelines of Generally Accepted Accounting Principles (GAAP) to effectively analyze the operations of an organization from a financial perspective.

It is a common, and true, statement that “Cash is King”. This is …

Continue reading CashFlowABC Episode 16 – Understanding Cash Flow (Part 1)

Whether you operate a warehouse, retail sales, service or manufacturing business you have some form of inventory.  In the past we have discussed some of the methods for maintaining the proper levels of inventory now we will discuss where to put these items within your facility.  You will have items that you use frequently and …

Continue reading CashFlowABC Episode 15 – Product Profiling

Valuation methodologies

 Weighted Average

Weighted average is, perhaps, the easiest of the valuation methodologies. You have no variances to analyze, only variation.

As the title implies, weighted average costing averages the purchase price of products and absorbs any price variation into your P&L through Cost of Goods Sold.

Continue reading CashFlowABC Episode 14 – Inventory Valuation Methodologies

There is a lot of talk regarding Lean improvements for business.  Removing waste, improving efficiencies and increasing profitability has become the battle cry of businesses around the country and the world.  But this is untested ground.  Where does one take the first step?  How does a company begin to head down this road to continual …

Continue reading CashFlowABC Episode 13 – 5S: The Basis for Lean

Turning Supply Chain Management into a Profit Center

There are a number of ways to generate value for your organization through the management of the supply chain. 
One thing that you will want to do is publish your results publicly within the company. 

 This will serve three purposes:
    (a)  Toot your horn – you won’t have to toot …

Continue reading CashFlowABC Episode 12 – Turning Supply Chain Management into a Profit Center

The purpose of safety stock is to protect against fluctuations in demand or supply or any uncertainty.  Safety stock is based and dependent on:

Frequency of ordering
Variability of demand (compared to the forecast)
Desired service level

CashFlowABC Episode 11 – Safety Stock

My Podcast Alley feed! {pca-6c7296ef12a7f56be0cf864a4412a32a}

We’ve seen a lot of queries lately asking various questions about the Statement of Cash Flow so we’re going to take this opportunity to demystify this alien evil.  We’re going to use a basic Statement of Cash Flow for Little Johnny’s Lemonade Stand that he set up in front of his …

Continue reading CashFlowABC Episode 10 – The Statement of Cash Flow

In any business setting, you need to be measuring appropriate Key Performance Indicators (KPI’s) to keep on top of the performance of the business.  The basic process for utilizing KPI’s is:

Identify what measurements are most important to your business
Measure the “current state” of the KPI’s
Establish targets for where you want them to get to
Measure the …

Continue reading CashFlowABC Episode 9 – Key Performance Indicators

EOQ is a method for setting a consistent order quantities that both minimize ordering and inventory carrying costs.  EOQ can be used hand in hand with reorder point systems as they function under similar assumptions:

That demand is relatively constant and known.
The order quantity is usually the same.  (The EOQ will remain constant until the review …

Continue reading CashFlowABC Episode 8 – Economic Order Quantities

Asset protection

Form an LLC or incorporate to protect your personal assets - Don’t comingle.  Use a business entity to separate your personal and business self.

Priorities

Payroll first – pay your employees first …

Continue reading CashFlowABC Episode 7 – Principles of Cash Savvy Business Management