Operating During a Cash Flow CrunchSubmitted by Mission Financial Planning on October 12th, 2014
Cash flow crunches hit almost every business at some point. We have an Emergency Cash Flow Tactics checklist that we provide clients in that situation, but only with the understanding that operating during a cash crunch is not how they should be operating long term. With that said:
On the “expense side”, the first thing we do is move to zero-based budgeting – every line item is budgeted at ZERO, and every purchase or expense requires approval/scrutiny. Examine how many employees are licensed to use cloud-based software, do you really need that many? Have you shopped merchant fees lately? Negotiated phone service?
On the income side, maybe it's time to adjust your fees or negotiate your contracts with PPOs.
Another thing we suggest is to fire any “guys” you have -- Coffee “guy”, plant “guy”, copier “guy”, for example. Staff – and owners – may need to chip in like they did in the early days of the practice and DIY.
The most important thing to do during a cash flow crisis is to exhibit strength, enthusiasm and dedication as a leader – don’t let financial stress impact staff morale or the excellence of care you provide your patients.