Posted on Tuesday,

How to Run a Monthly Financial Review Without Putting People to Sleep

Let’s face it—most business owners and staff don’t look forward to monthly financial reviews. They either dread them, delay them, or delegate them. Why? Because too often, the meeting feels like a confusing spreadsheet parade or a guilt trip over missed targets.

But it shouldn’t be that way.

A monthly financial review is one of the most powerful tools you have. Done right, it gives you a clear snapshot of where your business stands, where it’s heading, and what adjustments you need to make. I’m a numbers guy and love numerical tables, but that’s very dependent on the audience of the meeting. For most owners I deal with, it’s less about crunching numbers and more about telling the story behind those numbers.

Here’s how to run a financial review that’s efficient, insightful, and yes—worth staying awake for.

1. Focus on Trends, Not Just Numbers

Stop obsessing over a single month’s data. Business performance rarely moves in a straight line. Instead, zoom out and study patterns across time.

Ask:

Are sales steadily growing or losing momentum?
Are margins staying strong, or slowly slipping?
Is your cash flow behaving as you expected—or are there surprises?

Lay out the last 6–12 months side by side. This birds-eye view helps you catch subtle shifts before they become full-blown problems. It also enables you to recognize what’s working so you can do more of it.

Pro Tip: Color-code or graph key metrics to make trends jump off the page. Visuals beat walls of numbers every time.

2. Look at KPIs, Not Just Financial Statements

Your income statement and balance sheet tell you what happened. Your KPIs tell you why.

Choose 5–7 key performance indicators that reflect the true health of your business. These will vary depending on your industry, but may include:

Gross profit margin – Are you pricing your products or services effectively?
Accounts receivable days – How quickly are you collecting money?
Labor efficiency – Are you getting the correct output for your payroll investment?
Inventory turns – How fast is inventory moving? Are you overstocked or running lean?

Understand the impact of slight improvements. For example, a 5-day improvement in DSO could mean a $65,000 increase in cash.

Track these KPIs consistently—monthly, quarterly, annually—and discuss them out loud. When you put numbers in context, they become tools for decision-making, not just reports.

Pro Tip: Assign ownership. Make someone responsible for each KPI, so there’s accountability and follow-through.

3. Ask Two Simple, Powerful Questions

Once you’ve reviewed the data, don’t stop there. The real value comes from discussion and decisions. Ask:

What’s working that we can double down on?
What’s not working that we need to fix—or what do we need to stop doing altogether?

These two questions force you out of passive observation and into active strategy. They help your team focus, prioritize, and align on what to do next.

Pro Tip: Write down the answers. Turn them into real action items and assign next steps with deadlines.

4. Keep It Short, Structured, and Actionable

If your financial review takes two hours, you’re doing it wrong. Aim for a meeting that’s:

45 minutes max
Driven by a one-page summary or dashboard
Ending with 2–3 specific action items

The goal isn’t to analyze every penny—it’s to surface what matters and make clear decisions. I use our CFO report as the basis for the discussion. A tight, focused structure keeps your team engaged and turns the review into a rhythm, not a chore.

Pro Tip: Stick to a consistent format and time each month. Make it a habit that your business can rely on.

Bottom Line: Use It to Lead, Not Just Look Back

Your monthly financial review shouldn’t feel like punishment. It’s your chance to lead your business on purpose, not just react to what’s already happened.

When you bring strategy, structure, and storytelling to the table, financial reviews become energizing. They spark new ideas, surface issues early, and give your team confidence in the direction you’re heading.

So no more dreading the numbers. Use them to drive clarity, alignment, and momentum.

Contact me for help in crafting a better approach to monthly financial reviews.

Posted on Tuesday,

Run Your Business Like a Pilot: The Power of a Weekly Financial Dashboard

Imagine a pilot only checking the plane’s instruments once a month. Sounds insane, right? Yet that’s exactly how many business owners operate—waiting for monthly financials to tell them what already happened.

Successful leaders don’t fly blind. Visionary CEOs and sharp CFOs rely on weekly dashboards to monitor the business in real time, course-correct quickly, and avoid turbulence before it hits.

I’m a huge believer in weekly dashboards—and I’m not alone. Leaders like Geno Wickman (EOS) and Ryan Deiss (The Scalable Company) preach the same truth: you can’t manage what you don’t measure. And if you’re only measuring monthly, you’re already behind.

Why Weekly?

A lot can go wrong in 30 days.

Sales can stall. Cash can dry up. A few missed invoices can spiral. Teams can drift off course.

Waiting for end-of-month reports is like flying blind and only checking your instruments when the plane is halfway across the country.

That’s why leaders like Geno Wickman and Ryan Deiss push for weekly scorecards: a focused set of metrics that offer real-time visibility and fast feedback. You don’t need a mountain of data—just the right numbers, tracked consistently.

With my clients—especially multi-location service businesses—we keep it simple, repeatable, and laser-focused on the metrics that truly move the needle.

What Should Be On Your Weekly Dashboard?

Picture this: You’re running a $10M company with multiple service locations, 80 employees, and three lines of business—retail, wholesale, and field services. You’re moving fast, juggling people and inventory, and managing receivables, customer demand, and constant growth pressure.

In an environment this dynamic, you can’t afford to guess how things are going. You need a clear, consistent pulse on your business—every single week.

That’s where a well-built dashboard comes in. Not a cluttered spreadsheet with 50 KPIs, but a tight set of numbers that tell you exactly what’s working, what’s wobbling, and where you need to take action.

Here are the KPIs I’d want you to review every single week:

Sales by Segment

Break down your weekly revenue by:

Retail
Wholesale
Maintenance/Service

This tells you not just what you made but where it came from—and whether trends are shifting. Are retail sales slowing while wholesale is climbing? Is your maintenance team underperforming at one location?

Gross Margin by Segment

Not all revenue is created equal. You need to know which segment is actually profitable.

Track gross profit dollars and margins weekly by segment. Spot trends: Are wholesale margins tightening? Is maintenance labor eating into profits?

Cash Position

Current cash on hand
Change from last week
Any big inflows/outflows expected?

Even profitable businesses can go under if they aren’t watching their cash flow closely.

Accounts Receivable Aging

Total A/R outstanding
Past due buckets: 30/60/90+
Top 10 overdue accounts

This is critical for wholesale-heavy businesses with longer terms. Don’t let A/R get bloated—it’s cash you’ve earned but can’t use.

Labor Efficiency

Labor cost as a % of revenue, by location or team
Revenue per employee
Billable vs. non-billable hours (for service teams)

With 80 employees, labor can make or break profitability. Track productivity and staffing pressure points.

Open Work Orders / Jobs in Progress

How many jobs are open?
How many are behind schedule?
What’s stuck and why?

For service-based operations, this is the heartbeat of your fulfillment engine. A growing backlog is a red flag.

Customer Flow / Traffic

Customers served or orders completed by location
Conversion rate (if applicable)
Cancel/no-show rate (for retail or scheduled appointments)

This helps diagnose demand trends and operational friction early.

Inventory Position

Inventory turns by category
Weeks on hand
Stockouts or slow-movers flagged

Too much inventory = tied-up cash. Too little = lost sales. Weekly tracking prevents both.

Make It Simple. Make It Weekly. Make It Useful.

This isn’t about building a monster spreadsheet. Pick 6–8 core metrics. Keep the dashboard clean. Update it weekly. Review it without fail.

Same day. Same time. Same numbers.
Because consistency builds visibility—And visibility builds discipline.

As Geno Wickman says, “What gets measured gets done.”
As Ryan Deiss teaches, “If your business isn’t trackable, it’s not scalable.”
And I’ll add: If you’re not watching it weekly, it’s already slipping.

Final Word

You don’t need a finance degree to think like a CFO.

But if you’re serious about growth and about avoiding ugly surprises, it’s time to run your business like a pilot: dashboard up, eyes forward, every week.

If you want a dashboard built for real-world decisions—not just something pretty in a spreadsheet—let’s talk.

Posted on Tuesday,

The #1 Reason Why Businesses Fail: It’s Not What You Think

Many believe businesses fail due to poor sales. While revenue is crucial, it’s not the real culprit behind most business failures.

The #1 reason businesses fail is cash flow mismanagement.

I’ve seen it time and again—businesses with strong sales, expanding customer bases, and solid teams teetering on the brink of bankruptcy. Why? Because they lack a clear grasp of their cash position, financial trends, and looming risks.

Sales Alone Won’t Save You

A company can bring in millions of dollars and still be one bad month away from disaster if it doesn’t manage its cash effectively. You can’t sell your way out of a hole.

Take this example:

I worked with a manufacturing company generating $15 million in annual revenue.
On paper, things looked great—sales were growing, and the pipeline was full.
But behind the scenes?
- Receivables were slow, with some invoices sitting at 90+ days.
- Expenses were rising faster than revenue, eating up cash.
- Inventory was bloated, tying up cash that should have been available.

They were just weeks away from not making payroll.

Without visibility into their cash inflows and outflows, business owners based decisions solely on revenue—which is a dangerous way to run a business.

Why Cash Flow Problems Sink Businesses

Here’s what usually happens when businesses get into financial trouble:

Owners ignore the numbers. They assume strong sales mean everything’s fine so they skip reviewing financials regularly.
Receivables spiral out of control. Customers take too long to pay, and cash runs dry.
Expenses creep up unnoticed. They over-hire, over-stock, or splurge on non-essentials.
There’s no cash buffer. When a slow month hits or a big expense arises, panic sets in.
They make short-term, high-cost decisions. They rely on high-interest debt, slash costs too late, or make desperate moves.

How to Prevent Cash Flow Issues

To keep your business alive and thriving, you must fully understand your cash flow. Here’s how:

1. Use a 13-week Cash Flow Forecast

This is non-negotiable. Every business must have a rolling 13-week cash flow forecast that shows:

How much cash is coming in
How much cash is going out
What your cash balance will look like three months from now

Pro tip: Go to my free resources and get your 13-week Cash Flow Tool

This simple tool forces you to spot problems before they hit.

2. Track Your Cash Weekly, Not Monthly

A monthly P&L isn’t enough. By the time you see the problem, it’s too late.

Every Friday, review your cash position, upcoming payments, and potential risks.
Make monitoring cash flow a weekly habit—because your business depends on it.

3. Get Paid Faster

Slow receivables drain cash flow. Fix it by:

Sending invoices immediately, not waiting until month-end.
Shortening payment terms (Net 15 instead of Net 30 or 45).
Strengthening customer relationships to ensure timely payments.
Enforcing collections aggressively—contact customers before invoices are due, not after they’re late.

4. Keep a Cash Reserve

Aim to build a reserve of 1-3 months’ worth of operating expenses.
Treat it as an emergency fund for your business—not for growth but for survival.

5. Know Your Real Break-Even Point

Many business owners think they know their break-even number, but they may overlook cash needs like loan payments or tax obligations.
Run a true cash-based break-even analysis to understand exactly what you need to stay afloat.

Bottom Line

Sales alone don’t keep businesses afloat. Cash flow does.

If you don’t track where your money is coming from, where it’s going, and when you’ll need it, you’re gambling with your company’s future.

Don’t guess. Know your numbers. Use my free Cash Flow Survival Checklist weekly.

If you need help taking control of your cash flow, let’s talk. I’ve helped businesses turn things around before it’s too late—and I can help yours, too.

Don’t wait until it’s a crisis. Book a 15-minute chat now, and let’s uncover your biggest financial blind spots so you can take action today.

Posted on Thursday,

Kaizen and Continuous Improvement: A CFO’s Perspective on Lean Efficiency

I’ve been following Mark DeLuzio on LinkedIn for a while. He’s a Lean legend, and as a passionate advocate for Lean myself, I’m always looking for ways to boost efficiency and streamline processes. Mark frequently talks about Kaizen, the practice of continuous improvement, and how essential it is to examine and refine our processes regularly.

I completely agree, and given my deep family ties to Japan, I feel compelled to explore the true meaning and origins of Kaizen.

A Personal Connection to Japan and Kaizen

My great-great-grandfather spent much of his life in Japan. A fascinating book, Verbeck of Japan, written in 1900, details his work and influence there. Recently, I used AI to summarize the book in a modern writing style, making it much shorter and much easier to read. (The photo is my great-great-grandfather and great-grandfather with young students, including the Emperor Meiji.)

Since I have this connection to Japan, I felt compelled to look deeper into the origins of Kaizen (改善) and its true meaning:

改 (Kai): “Change” or “improvement.”
善 (Zen): “Good” or “better.”

Together, Kaizen (改善) translates to “improvement” or “making things better.” In business and personal development, it’s often interpreted as “continuous improvement”—the mindset of consistently refining processes to drive better outcomes.

How Kaizen Became a U.S. Business Term

To be honest, I’ve never liked using less-familiar terms when a good English equivalent exists. But Kaizen is an exception. This word has taken on a life of its own in the world of U.S. business, and for good reason.

Kaizen’s rise to prominence in the U.S. began with Toyota’s manufacturing success in the 1980s. American businesses, eager to replicate Toyota’s process-driven success, adopted the term through the study of Lean Manufacturing. What started in the factory soon evolved, spreading into broader realms like business management, finance, and even personal development. Now, Kaizen is so ingrained in U.S. business culture that it’s hard to imagine a corporate world without it.

Even though Kaizen essentially means “continuous improvement,” the term embodies a deeper, more systematic philosophy that English alternatives like “process improvement” simply don’t convey. That’s why it resonates so deeply and has stuck.

Applying Kaizen in SMB Finance and Operations

At my CFO services firm, we live and breathe Kaizen, constantly refining financial systems and processes for small and mid-sized businesses. Whether we’re streamlining financial reporting, optimizing cash flow, or strengthening internal controls, the objective is always clear: eliminate inefficiencies and create more value.

I recently came across a YouTube video that humorously explains how to make a peanut butter sandwich—yet it highlights a very real business challenge: the difficulty of documenting and transitioning processes. One of the biggest problems I see? Inconsistency.

The first—and most critical—step in improving any process is ensuring it’s executed the same way every time. Without consistency, improvement is impossible.

Real-World Kaizen: Fixing a Broken Back-Office Process

We recently onboarded a new client, and it didn’t take long to uncover a glaring issue: their back-office financial processes were completely chaotic.

No documentation.
No standardized workflows.
Different employees were handling things in different ways.

The result? A perfect storm of inefficiencies, confusion, and costly financial blind spots.

To turn this around, we applied a Value Stream Mapping approach to thoroughly analyze their entire cash-to-cash process—everything from revenue collection to vendor payments. By pinpointing bottlenecks and eliminating unnecessary steps, we created a more streamlined, repeatable system that not only boosted efficiency but also minimized errors. This is Kaizen in action—turning chaos into control, one step at a time.

Kaizen is a Mindset, Not Just a Process

Kaizen is more than just a one-time fix—it’s a mindset, a commitment to ongoing refinement and improvement in every aspect of your business. Whether you’re in manufacturing, finance, or leadership, the core principles remain the same:

Standardize first. Establish consistency in your processes.
Measure and analyze. Identify inefficiencies and areas for improvement.
Improve and refine. Eliminate bottlenecks, cut waste, and optimize workflows.
Repeat continuously. Remember, improvement is a never-ending journey.

At Verbeck Associates, we apply this approach to every client, ensuring their financial systems aren’t just “good enough” but are efficient, scalable, and continuously improving.

So, how are you applying Kaizen in your business? Let’s connect and discuss how we can help you create leaner, more efficient processes for lasting success.

Posted on Tuesday,

Top Strategies for SMB Improvement in 2025

As we dive into 2025, small and medium-sized businesses (SMBs) have a world of opportunities and challenges ahead. Focusing on strategies that boost efficiency, profitability, and financial stability is key to staying competitive and driving growth. Here’s a look at some top strategies you can implement to make 2025 your best year yet:

1. Leverage Data to Drive Decisions
In 2025, data-driven decisions are a must for SMBs. Start harnessing your financial and operational data to unlock insights that lead to better outcomes.

Invest in tools: Affordable software like QuickBooks, Xero, or industry-specific platforms can help you track sales, cash flow, and customer behaviors.
Identify key metrics: Focus on KPIs such as gross profit margin, customer acquisition cost, and inventory turnover to guide your decisions.
Run regular reviews: Make data analysis a habit—weekly or monthly reviews will keep you agile and on track.

2. Focus on Operational Efficiency
Streamlining your operations can make a huge difference to your bottom line.

Streamline workflows: Take a fresh look at your processes and identify bottlenecks. Automate repetitive tasks to save time and reduce errors.
Reduce waste: Apply lean principles to minimize wasted resources—time, materials, or money. Where can you cut out waste?
Optimize inventory: Use data to maintain the correct stock levels—too much or too little can hurt your business.

3. Revisit Your Pricing Strategy
Pricing can make or break your profitability. In 2025, ensure your pricing reflects both market value and profit goals.

Conduct a pricing audit: Look at how your pricing compares to competitors and costs.
Test new models: Consider tiered pricing, subscription models, or bundling to drive more revenue.
Communicate value: Ensure your customers understand the value they’re getting for the price.

4. Invest in Employee Development
Your team is your greatest asset. To go far, you need to go together.

Upskill your team: Offer training programs aligned with your goals—sales skills, technical knowledge, or leadership.
Enhance workplace culture: Foster collaboration and innovation by creating a positive and inclusive work environment.
Review compensation plans: Make sure compensation is aligned with performance and your long-term goals.

5. Strengthen Financial Planning and Cash Flow Management
Financial stability is essential for SMB success.

Update your budget and forecast: Use insights from 2024 to create realistic projections for the year ahead.
Build cash reserves: Aim for 3–6 months of operating expenses in reserves to handle unexpected expenses.
Explore financing options: If growth is on your radar, look into funding sources like expanded lines of credit or SBA loans.

6. Embrace Digital Transformation
Technology can level the playing field for SMBs competing with bigger players.

Enhance your digital presence: Update your website, invest in SEO, and stay active on social media to engage with customers.
Adopt CRM software: Use customer relationship management tools to boost sales and improve retention.
Use AI and automation: Automate repetitive tasks like email marketing and scheduling to free up your time.

7. Build Resilience in Your Supply Chain
Recent disruptions have shown just how critical a resilient supply chain is.

Diversify suppliers: Don’t rely on just one supplier. Build relationships with multiple vendors.
Negotiate contracts: Secure better terms with suppliers to protect your margins.
Improve logistics: Look at shipping and inventory management processes for cost-saving opportunities.

8. Strengthen Customer Relationships
Loyal customers are your business’s backbone.

Focus on retention: Create loyalty programs or incentives for repeat customers.
Improve customer experience: Regularly gather and act on feedback to exceed expectations.
Personalize marketing efforts: Use data to tailor communications and offers to specific customer segments.

9. Reassess Your Strategic Plan
2025 is a great time to revisit your long-term strategy and ensure you’re headed in the right direction.

Align goals with vision: Ensure your goals reflect your business’s mission and values.
Identify growth opportunities: Explore new markets, products, or services that align with your expertise.
Develop a risk management plan: Address potential risks proactively, from economic downturns to regulatory changes.

10. Partner with Experts
Sometimes, the best way to improve is by getting help from outside experts.

Engage a fractional CFO: Get expert financial guidance without the cost of a full-time hire.
Consult industry experts: Work with consultants specializing in marketing, HR, or technology.
Join networking groups: Connect with other business owners to exchange ideas and best practices.

Conclusion
2025 holds plenty of opportunities for SMBs ready to adapt, innovate, and plan strategically. Your business can thrive in the year ahead by focusing on data, efficiency, team development, and solid financial planning.

If you’re ready to take your business to the next level, I’m here to help. Let’s connect and see how a fractional CFO from Verbeck Associates can support you with financial expertise that drives real growth in 2025.

Posted on Monday,

Your Year-End Financial Checklist: Closing Strong and Planning for 2025

As the year winds down, small and medium-sized businesses (SMBs) are at a pivotal crossroads: it’s time to finish strong while setting the stage for even greater success in 2025. This is your opportunity to assess whether your financial performance hit your goals, tackle any remaining obstacles, and lay out a bold strategy for the future.

To help you navigate this critical transition, I’ve created a comprehensive checklist to ensure you close out the year with confidence and kick off the new one with a solid financial foundation. I’m here to help you close out 2024 on a high note and set the stage for a prosperous year ahead!

1. Reconcile Accounts and Review Financial Data.

To set a strong foundation for the year ahead, begin by ensuring your financial records are both accurate and up to date:

Reconcile all accounts: Reconcile bank accounts, credit cards, and loan balances to ensure they match your records. This helps avoid discrepancies that could affect decision-making.
Review key financial statements: Analyze your profit and loss statement, balance sheet, and cash flow to identify any trends, areas for improvement, and any potential red flags. This offers valuable insights into your business’s financial health.
Resolve outstanding invoices and bills: Address any unpaid invoices or overdue bills to ensure your cash flow remains steady.

Tip: Having accurate financial data is crucial for making well-informed decisions as you close out 2024 and prepare for a successful 2025.

2. Set Your Financial Baseline for 2025.

Building a strong financial plan for the upcoming year starts with a thorough analysis of your performance in 2024. This will help you set clear, achievable goals for 2025:

Assess profitability: Dive deep into the performance of individual products, services, or business units to understand what’s driving success and where improvements are needed. This breakdown will guide you in prioritizing the most profitable areas.
Evaluate expenses: Review your spending and identify areas where cost-control measures can be introduced in 2025. Look for patterns in overspending or inefficiencies that can be streamlined.
Analyze cash flow trends: Examine your cash flow over the past year to pinpoint when inflows and outflows peak. Understanding these patterns will help you plan more effectively for liquidity management in the year ahead.

Example: Use this analysis to set goals for key financial metrics, such as gross margins, asset turnover, and working capital.

3. Solidify Your 2025 Financial Plan.

Kick off the new year with a clear, actionable roadmap that positions your business for success:

Create a sales forecast: Analyze current trends, market conditions, and upcoming opportunities to project your sales for 2025. Use this forecast to set realistic revenue targets and align resources accordingly.
Develop a cash flow projection: Use tools like my 13-week Cash Flow Forecast to map out expected cash inflows and outflows. This will ensure you have the liquidity needed for both daily operations and growth initiatives throughout the year.
Outline a budget: Build a budget that balances strategic investments with cost-saving measures. Prioritize spending that drives growth while maintaining a focus on efficiency and profitability.

Pro Tip: Build in flexibility within your financial plan to quickly pivot in response to unexpected challenges or emerging opportunities in 2025.

4. Streamline Year-End Processes
Efficient year-end processes are key to saving time and reducing stress. Make sure you finish the year strong with these actionable steps:

Finalize all 2024 transactions: Reconcile accounts, close out any pending invoices, and ensure all customer payments are received before December 31.
Follow up on overdue receivables: Act now to collect any outstanding payments and improve your cash flow before the year closes.
Prepare for tax season: Double-check that all deductible expenses are well-documented and ready for tax filing.

Action Step: Automate routine tasks, such as setting up reminders for accounts receivable and payable, to ensure smooth year-end operations and free up time for strategic tasks.

5. Align Your Team for Success
Your team is essential to closing the year on a high note and hitting your 2025 goals. Get them on the same page with these strategies:

Set clear expectations: Make sure your team knows exactly what’s expected in the final stretch—whether it’s wrapping up client projects or clearing out inventory.
Review your 2025 financial plan: Share your financial strategy with key team members to ensure everyone is aligned on priorities and performance targets.
Evaluate compensation plans and incentives: Assess how bonuses or incentives can drive your team’s motivation and performance as you enter the new year.

Consider: Boost morale by offering year-end bonuses or hosting team celebrations to celebrate your collective success and inspire energy for the year ahead.

6. Optimize Your Tax Position
Take advantage of your final opportunity to make strategic moves that can reduce your tax burden:

Accelerate expenses: Purchasing equipment or supplies before year-end can increase your deductions for 2024.
Defer income: Push back invoicing or payments until January to shift income into 2025 and potentially lower your tax liability this year.
Consult your tax advisor: Review available tax credits or deductions to ensure you take full advantage of every opportunity.

Remember: Having a solid relationship with financial professionals gives you another layer of wisdom and resources.

7. Evaluate and Improve Financial Systems
The end of the year is the perfect time to assess whether your current financial systems are meeting your needs and setting you up for success in the coming year:

Identify bottlenecks: Review your processes, from reporting to cash flow management, and pinpoint any areas that need improvement.
Invest in better tools: Consider upgrading your financial software or tools to improve efficiency, accuracy, and decision-making in the new year. Hiring a fractional CFO is another possibility.
Set clear KPIs: Establish key performance indicators to track your financial health and ensure you meet your targets throughout 2025.

Think About: Ask the staff that use the tools the most to give you feedback.

Key Takeaway
Closing 2024 with a solid financial position and a clear strategy for 2025 is essential for SMBs aiming for sustained growth and profitability. You’ll enter the new year with confidence and clarity by streamlining your year-end processes, aligning your team, optimizing your tax position, and improving your financial systems.

Need help navigating year-end challenges or building a strategic financial plan for 2025?
Reach out to Verbeck Associates for expert guidance from a Fractional CFO. Let’s set your business up for success in the new year!

Posted on Thursday,

If You Water It, It Grows: Cash Flow Management for Small Businesses

I love the saying, “If you water it, it grows. If you ignore it, it dies.” This principle applies to running a business—especially when it comes to managing cash flow. As a fractional CFO, I often remind clients that cash flow is the lifeblood of their business; it needs regular, focused attention to thrive.

Recently, I spoke with a small group of business owners about my 4 Pillars for Small Business framework (explained more in my free booklet, Be Your Own CFO), and we honed in on cash flow. Cash flow isn’t just about having money in the bank. It’s about understanding where cash comes from, how it flows through the business, and how to measure and manage it effectively.

Why Cash Flow Needs a Detailed Approach

Cash flow management is most effective for small businesses when handled in detail. Here’s a simple but powerful method: use a cash flow tracking tool (like the one available here) and set up a weekly review process. This involves updating expected customer deposits, cash payments for payroll, and other cash payments for operating expenses by vendor. Make it a habit to recast these forecasts each week with actual numbers—this ongoing process will help you identify trends and adjust for any surprises.

Key Cash Flow Metrics to Monitor

There are a few metrics I always recommend tracking to get a clear view of cash flow:

• Net Income: The foundation of cash flow.

• Days Sales Outstanding (DSO): How quickly you collect receivables.

• Inventory Days: Reflects the average time inventory is held before it’s sold.

• Days Payable Outstanding (DPO): Measures how long you’re taking to pay vendors.

Monitoring these metrics gives insights into your cash flow drivers, helping you make more informed business decisions.

Cash Flow Impact: The Power of a 5-Day Improvement in DSO

Let’s look at an example of how a small improvement in DSO can positively impact cash flow.

Say you have a $5 million business with an accounts receivable balance of $575,000. Here’s how you calculate DSO:

1. Average Daily Sales:$5,000,000 ÷ 365 days = $13,699 (daily sales)

2. DSO:$575,000 ÷ $13,699 = 42 days

Now, let’s assume you reduce DSO by 5 days. Your new DSO would be 37 days, yielding $68,500 in additional cash flow:

• New Receivable Balance with 5-Day Improvement:

37 days x $13,699 = $506,500

• Cash Flow Improvement:

$575,000 – $506,500 = $68,500

This means a small change in collections can significantly improve cash flow, freeing up cash for things like reinvesting in the business or paying down debt.

The Strategy: Policies, Awareness, and Consistent Tracking

Managing cash flow doesn’t happen by accident. You must establish policies around invoicing, follow-up, and payment terms and build awareness within your team. You need to use dashboard reporting to track cash flow metrics and keep them at the forefront of your mind. Most importantly, you should focus on the details—cash flow is in the transactions.

You’re nurturing your business’s financial health by giving cash flow the attention it deserves. Remember: if you water it, it grows. And with a steady focus on cash flow, you empower your business to grow sustainably with fewer unpleasant financial surprises along the way.

Have questions? Contact me!

Posted on Monday,

Review, Recalibrate, Reframe: Finish Strong and Set the Stage for Success

Finish Strong in Q4 and Set the Stage for Success in 2025

As we approach the end of Q4, it’s crucial for business leaders to prepare for the year ahead. It’s budget season, and this is the perfect opportunity to not only get your financials in order but to take a step back and plan strategically for growth.

REVIEW

I like to get started early on the end-of-quarter process, and many of my clients have adopted a rolling 12-month forecast to stay proactive. This dynamic approach makes planning and budgeting more flexible and manageable. It also allows you to reflect on how the year is going. Celebrate the wins, acknowledge the losses, and leave behind the challenges that didn’t serve you or your business. Being consistently proactive is essential to positioning your business for the future.

RECALIBRATE

If you’ve been operating on autopilot, the end of a quarter/year is the perfect time to recalibrate. Start fresh and get ready for a productive next quarter/year. As you recalibrate, take a moment to reflect: Is your vision for the business still the same? If not, what needs to evolve to keep pace with industry shifts, market demands, and even your own interests and personal growth/lifestyle hopes?

This is a time to check your budget, as well. I’ve always been a fan of zero-based budgeting—starting from scratch and building the budget based on current needs rather than simply adjusting the previous year’s numbers. This disciplined, top-down and bottom-up approach forces you to think critically about each expense and its alignment with your business strategy and goals.

REFRAME

As you plan for new quarters and new years, remember that high performers thrive on challenges and measurable results. They aren’t satisfied with easily achievable objectives—they seek stretch goals that push their limits, drive growth, and elevate both their teams and the company. High performers want to keep score and track progress toward ambitious goals. This may be a good time to reframe your incentives and polish your compensation plans.

In setting these stretch goals, it’s important to stay objective. While we aim high, we must also recognize the real-world factors influencing success. Sometimes, external challenges or personal circumstances come into play. Ask yourself: Did we put in the necessary effort? Were there unforeseen obstacles? Did personal or team dynamics shift? By maintaining this balanced view, you ensure that the drive for high performance remains grounded in reality, allowing for growth and the flexibility to adjust plans when necessary.

Stretch goals should inspire, but they must also account for the complexity of real-world challenges.

Here’s a Quick Recap of the Review, Recalibrate, Reframe Process:

Review Your Organizational Structure: Take a close look at your organizational chart. What roles or departments need to change? Are there gaps that need filling or efficiencies that can be improved? Get the right people in the right positions.
Analyze Historical Sales Data: Dive deep into your sales history, analyzing performance by customer, segment, or product. The profit matrix is an excellent tool for identifying which customers fall into the low-value, low-margin quadrant (LV, LM). This helps you focus on the most profitable areas of your business. (But remember, even lower-value/lower-margin customers deserve respectful treatment—your business reputation depends on how ALL your customers perceive you.)
Examine Cash Flow, Profitability, and Efficiency KPIs: Look over your cash flow, profitability, and efficiency KPIs to assess the health of your business. What adjustments can you make to boost financial performance in the coming year?
Set Measurable Goals for Improvement: With your analysis in hand, develop clear, measurable, and stretchable goals for the coming year. These can be firmed up toward the end of each quarter, but get early numbers on paper. Whether it’s increasing profitability, improving cash flow, or streamlining operations, a solid plan will ensure you’re driving the business in the right direction. Let your team know of new goals they can work toward in sales, efficiency, or living out company values.
Ensure a Clear Financial Model: Create a clear financial model with a detailed monthly income statement, balance sheet, and cash flow statement. This provides a concise yet comprehensive snapshot of your financial health, helping you better track progress and forecast results.
Polish Processes: Are you closing each month in a timely way? Do your reports reflect accurate input and help you make wise decisions? Is your finance team working toward excellence and accuracy in all assignments/routine tasks?
Check In With Yourself: As a business leader, your company is only as good as you. How are you performing? Are you communicating your vision to your team? Do they see it? Is the company and your team living up to your values? It’s easy to get into a rut, and a quarterly review of yourself can help you stay out of one.

Prepare for Success in 2025!

The business landscape is evolving, and staying ahead requires smart, proactive planning. Use the remainder of this quarter to solidify your strategy, ensuring that you enter the new year with clarity, focus, and a clear plan for success!

PS: You might discover that you need a fractional CFO now. Let’s talk!

Posted on Wednesday,

Building a Strong Business: Compensation Plan Lessons from BE 2.0

I’ve always been a fan of great business books, and lately, I’ve been diving into Jim Collins’ BE 2.0 (Beyond Entrepreneurship). This book is packed with insights, many of which feel especially relevant to the challenges most companies face today. One principle that stood out for me was a key concept from his classic Good to Great: “First who, then what”—which means getting the right people on the bus before deciding where to drive it.

Collins emphasizes the importance of aligning your team with your company’s values and ensuring they’re in the right roles. It’s not just about talent; it’s about passion, long-term vision, and fit.

The Problem with Compensation Plans

One powerful lesson in BE 2.0 is that compensation plans alone do not guarantee performance. Collins highlights that some of the highest-paid CEOs aren’t necessarily leading the best companies. In fact, short-term financial incentives can sometimes lead to behavior that undermines long-term success, even if they boost short-term results.

I’ve seen this firsthand. I implemented an incentive program several years ago that failed because it created unhealthy competition. The plan prioritized individual success over team success, and the friction between employees started to affect the culture. It was clear that I hadn’t read the culture correctly. After tweaking the plan to encourage more teamwork, the results improved—not just for the company but for the employees themselves.

Individual vs. Team Incentives: Finding the Balance

What fascinated me about Collins’ perspective is the evidence he presents on individual versus team rewards. He argues that short-term rewards can backfire, and I’ve seen both sides. While I appreciate his viewpoint, I tend to favor a balanced approach, especially for smaller businesses. I often see a mix of individual and team-based incentives work best in SMBs, particularly with smaller teams where roles and contributions are more visible.

For example, I’m currently working with a client who’s facing this challenge. They have a “star performer” who isn’t delivering, while the rest of the team is stepping up to pick up the slack. The issue? Their compensation plan heavily favors individual performance, and it’s starting to erode the sense of fairness within the team. To solve this, we’re overhauling their comp plan to reflect not just individual contributions but also team efforts. However, before making any changes, we’re re-forecasting the entire business to ensure the new plan aligns with the company’s strategy and market conditions.

Back to Basics: Using KPIs to Guide Compensation

As part of this process, we’re going back to basics by focusing on key performance indicators (KPIs). For this client, we’re using an 80/20 profitability matrix to evaluate their customer base. By analyzing sales and gross margins, we can identify which customers contribute most to profitability and which ones may need to be let go.

For example, we’ve developed a 90-day strategy to either move low-value customers to higher-margin categories or phase them out. Don’t wing it—having a business plan with targets is essential. Many business owners rely on gut feel, and while that can work, it’s critical to back it up with solid data. That’s why we’re using a simple forecast model, which includes an income statement, balance sheet, and cash flow statement tied to customer-specific sales forecasts.

Guidelines for Building a Compensation Plan

If you’re considering developing or revamping a compensation plan, here are a few key points to keep in mind:

Assess your culture: Is your team more collaborative or competitive? Do they value individual rewards or group success?
Align with your values: Make sure your compensation plan reflects your company’s core values.
Use accurate, timely data: Ensure you have reliable monthly financials to understand what revenue you have available for incentives.
Test and adjust: Trial your incentive plans before committing. Gather feedback from key stakeholders and make tweaks based on performance.
Keep it flexible: Never lock a compensation plan in stone. Business environments change, and your plans should evolve with them. If stability is needed, pay fair base salaries, but be transparent about potential changes to incentive plans.

There’s no perfect compensation plan, but a well-thought-out incentive structure can drive results, boost morale, and increase profitability. For SMBs, I often prefer short-term goals with regular rewards, such as quarterly incentives. This approach fosters urgency, accountability, and results without sacrificing long-term thinking.

If you’re developing or revamping your compensation plan and want to ensure it drives results while supporting your company culture, let’s talk. Contact me to discuss how we can create a plan that fits your business.

Posted on Monday,

7 Ways to Help Your Small Business Perform Better

“What does a fractional CFO do?” I’ve been getting a lot of questions like this lately. It’s prompted me to think about my role and how I help companies. Turns out, it’s a position with multi-faceted responsibilities, but the bottom line is

My CFO firm helps small and medium-sized business (SMB) owners perform better.

I admit, that’s a pretty broad statement. Many different elements of business fall under the goal of “performing better.” Owners want to make more profit, grow in size, efficiently deliver better customer value, and perhaps most importantly, experience more fulfillment with better control and have less stress as they lead their company.

As a Fractional CFO for over 18 years, I’ve enjoyed coming alongside awesome small business owners to help them reach their goals and sleep better at night while doing so. I am continually learning and reading books and getting information from other successful business people such as Geno Wickman from EOS Systems, Michael Gerber author of the E-Myth), Kevin O’Leary, Brendon Burchard, and Tony Robbins. Many of their doctrines influence how I help my clients. Here is a list of solid recommendations that have grown from reading leaders such as these and the experience I’ve gained “boots on the ground” with clients.

These aren’t in priority order as they are all valuable toward the goal of performing better. I encourage you to pick the one or two that resonate most with you.

1. Know your numbers. I cannot stress enough how important it is to understand your company’s financial picture (even though you tell me, “But I’m not an accountant!“) Many business owners don’t even understand the basics and that’s a recipe for failure.

2. Implement four pillars of strong financial practices: a) solid numbers, b) forecasts, c) weekly scorecard reviews, and d) monthly CFO reports. All of these are outlined in more detail in my Be Your Own CFO booklet, a 29-page guide to help business owners have better CFO practices. Free when you subscribe to my blog at VerbeckAssociates.com.

3. Show up strong and practice a daily rhythm. What I mean by “show up strong” is to come to work with a great attitude with physical/mental readiness to work hard. A daily rhythm, unique to you but repeatable, will help you be even more productive, perform better over the long term, and let you push through the messy middle we all get stuck in from time to time.

4. Plan your time and work your plan. I find it helpful to plan my week in time blocks, with periods focused on client service, business development, exercise, etc. My calendar is detailed and consistent week to week. As Michael Hyatt has said, “What gets calendared gets done.” Even if your day goes off track, having a planned approach can help you regroup or keep you motivated to complete the day’s goals. It also helps you identify which types of interruptions routinely knock you off track so you can come up with strategies to eliminate or reduce them.

5. Cultivate an attitude of growth. One of my early mentors, Alan Weiss, said “If you are not innovating, you’re not growing, and if you aren’t growing, you’re dying.” Stability is vastly overrated. I love that. The guy is still progressive and considered a rock star in the consulting world.

6. Document processes. Well-thought-out systems and processes help small businesses scale. Documenting forces you to slow down and evaluate each step, making it teachable to others on the team (videos and screen recordings can help.) Plus, it can help you identify tasks that may no longer be necessary. And when you need to go on vacation, (and you do NEED to go on vacation) documented processes help work continue in your absence.

7. Remember that slow is smooth, and smooth is fast. We live in a world that prioritizes rushing, speed, and “efficiency.” While it’s great to get systems in place that help us move more quickly through day-to-day minutia, it’s also important to slow down and not have to go back and re-do tasks or fix small errors. Pay attention to mistakes you or your team are making. Are you encouraging people to move too quickly (or making yourself move too quickly?) Naturally fast-paced people need to consciously slow down and learn to double-check work (and naturally slow-paced people may need to trust themselves after one or two run-throughs rather than going over things several times.)

What principles have you found helpful in running your small business? I’d love to hear from you! Contact me!