A Simple Yet Critical Cash Activity by Ruth King This weekend it finally got cool in Atlanta. When I got up this morning it was a cool 43 degrees. Ok, for those of you in the northern states, 43 degrees in January is a heat wave. But for us in the south, that's downright cold for this time of year. Companies in the south will be busy. And, busy sometimes means getting lax because "you don't have time". The worst thing to become lax with is cash. For those of you with commercial companies, you get so busy that you don't have time to bill. For those of you who have residential companies, you install equipment using financing and you don't submit the financing papers because you don't make the time to go back to the customer for his signature on the papers. I've seen this happen too many times to count. When you are busy it is even more critical to watch your cash.  There usually is a lot coming in; especially for those of you who collect COD. Accounting for it can get sloppy. The best way to ensure that you always keep track of cash, receivables, etc. is to have a weekly cash flow report and complete it whether you are slow, busy, or in between. And, once you have completed them for a year or more, you can refer back to the previous year to see what happened then. The weekly cash flow report allows you to see the amount of cash you started the week with, your collections and your disbursements. You'll know the ending cash for the week. The most important part of the report is the estimates for the following week. You estimate collections, payroll, payables, and loan expenses to determine if you have enough cash to cover the next week's expenses. If not, it's better to know it Friday before payroll is due the following week. You can step up collection efforts or make arrangements to use a line of credit so there is enough cash for payroll. There is a side benefit to the cash flow reports. Each Friday the accounts receivable and accounts payable have to be current to do the reports accurately. Your bookkeeper should put the cash flow report on your desk before she leaves Friday afternoon. If you'd like a copy of the weekly cash flow report, send me an email (ruthking@hvacchannel.tv). Perhaps I'm sounding like a broken record with respect to weekly cash flow reports because I've written about them before. However, these reports have saved many a contractor headaches and stress because you always know where your cash is...the lifeblood of your business. To contact Ruth King call 800-511-6844 or send an email to ruthking@hvacchannel.tv This article is reprinted from the October 23, 2005, issue of Contractor Cents. "Copyright 2005, Ruth King. All rights reserved. Contact Ruth King at ruthking@hvacchannel.tv or 800-511-6844."