Take Control of Your Cash: A Simple Strategy for Contractor Financial Health

We typically work with business owners between three and 100 employees. That’s usually the range where those businesses don’t yet have a full-time, full-scale CFO (Chief Financial Officer). They may have a controller or other roles, but it’s one of those areas where owners are left wondering, “How do we track our money if we don’t have someone dedicated to it?”

Hey, it’s Scott Beebe with Business On Purpose. Thanks for joining us. As always, I wanted to give you something very simple that can help. We call it the ABCs of tracking your money. If you don’t happen to have a full-scale CFO in your business, this is especially for you.

By the way, at the time of this recording, I’m about to launch my second book called The Chaos Free Contractor. Be on the lookout for it on Amazon! And no, you don’t have to be a contractor to read it. The little-known secret is everything we write applies to any business owner with three to 100 employees.

So let’s dive into this idea of tracking your money with the ABCs. The Level 2 dashboard that we use all the time utilizes the ABCs, so you can actually use your dashboard for this. The ABCs are used to track your finances and better understand your financial health. Let’s break it down into some manageable components that you can easily implement.

Starting with the A — it represents Accounts. That’s what the A stands for. If you have multiple accounts, which we hope you do, it’s essential to track those multiple bank account balances. When I say multiple, I mean five, six, seven accounts minimum, and you should track those weekly throughout the year. This practice allows you to observe the flow of cash rather than relying solely on traditional cash flow statements, which are static and hard to track. Doing this with the accounts will help you gain a clear picture of where your money’s going and how to utilize it across your various accounts. So that’s the A.

The B stands for Bookkeeping, another crucial aspect of financial tracking. Each week, review your aging and receivables report to understand what’s owed to your business. Simultaneously, examine your outstanding payables, particularly those due in the next 30 days. This dual perspective of what’s owed to you and what you owe provides a snapshot of your current cash position. And again, for owners, cash is reality—it’s where you live.

So, those are the A’s (Accounts) and B’s (Bookkeeping). What does the C stand for? Either Client or Customer. Without clients, there’s no need for accounts or bookkeeping, right? Each week, you’ll simply track any client metric that’s relevant to your marketing process, both as prospects and as paying clients.

When you start to combine those elements—your account balances, your receivables, your payables, and your clients or customers—you create a comprehensive view of your financial status. What this allows you to do is see your past transactions, your present situation, and your future obligations all at once.

By implementing these ABCs of tracking, you’re creating boundaries for your financial river. Remember, we’re not trying to stop the flow, but instead, we’re trying to redirect it in ways that benefit your business. That’s going to give you a more comprehensive and actionable view of your finances, allowing you to make informed decisions and maintain better control over your future.

I know some of this might spark questions for you. Go to mybusinessonpurpose.com/ask and there you’ll find a calendar to book time with one of our professional coaches. If you’re a business owner with a team of three to 100 employees and you’re generating $1 million or more in revenue (if you’re a contractor) or $500,000 or more (if you’re a service provider), we’d love to invite you to hop on a 20-30 minute call with one of our coaches. You can ask us anything—no strings attached.

And if you want to know how we can work with you as a client, just ask and we’ll tell you. Visit mybusinessonpurpose.com/ask.

 

Ready to get clarity? Visit mybusinessonpurpose.com/ask to connect with a coach today!

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