Do you know where your firm’s money is at any given moment? This is a necessity because, as we all know, you can produce a profit and still be short of cash. If you’ve owned a firm for any length of time, you know that money is not a constant. It ebbs and flows, sometimes predictably and sometimes erratically.
The challenge as a business owner is to have strategies in place to make sure that you always have funds available when you need them.
Strategy 1: The first strategy you should employ, if you haven’t already, is to cultivate and maintain a good relationship with a local banker. Bankers tend to move from one financial institution to another as they advance in their careers, and it’s usually a good idea to stay with your banker when he or she moves. So, you’ll need to choose this relationship wisely. If you run into financial difficulty in the future, this person may just be your lifeline amid the nameless, faceless decision-making committees at your bank.
Strategy 2: Your second strategy is to make sure you have a line of credit that’s sufficient to cover any variations in cash flow and to bridge the gap between accounts receivable and accounts payable. This can be the key to your firm’s survival during tough times.
Strategy 3: Your third strategy involves developing another relationship, this time with a “numbers person.” If you want to get a handle on your firm’s finances, you need a relationship with a good CPA or bookkeeper who can track and, more importantly, interpret your firm’s numbers for you on a monthly basis. This means a meeting every month, no later than the tenth of the month, to make sure your firm stays on course.
Over the years, the Academy has developed several financial benchmarks specifically for the use of estate planning attorneys in evaluating whether they’re on track when it comes to their firm’s finances.
Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
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