3 Questions To Optimize Your Financial Performance

Small businesses need to ask these three questions to optimize financial flow.



If questions are truly answers, then small-business owners must ask themselves three simple questions at the end of every month:

  1. How did my business perform this month?
  2. What is my year-to-date financial performance?
  3. What can I do to improve financial results and, ultimately, maximize my cash flow?

These three questions are essential to financial flow, and the answers rest in the monthly financial closing process.

Successful companies, both public and private, have policies, procedures and workflow to determine financial results within days of the month’s end. With this information, many companies can answer the first two questions. However, the true value of financial flow lies in obtaining the right type of financial information and reports to help answer the third question.

What is Financial Flow?


According to the FlowFirst management model, financial flow is a company’s ability to process, record and report accounting and financial transactions on a timely basis to produce financial statements and to facilitate better decision making.

In the FlowFirst management model, each flow is a combination of the processes, people and technologies that are needed to maximize cash flow. Financial flow is central to this model, in that it requires accounting and finance groups to collect all transactional data and then provide financial performance reporting to the entire organization. As such, financial flow directs accounting processes and controls, budgeting, forecasting and planning, and operational analysis.                  

Integrating Financial Flow

The FlowFirst management model is reliant upon sound business processes and the integration of financial flow with sales and operational flow to maximize cash flow.

Financial statements and other financial information found in monthly closing reports are invaluable in facilitating this integration.

On their own, financial statements provide:

  • Monthly and year-to-date profitability snapshots
  • Balance sheet and cash flow statements
  • Comparison to prior periods and to budgets

Financial statements alone do not tell you all key sales and operational information:

  • Customer mix or product mix
  • Client retention or attrition on a monthly or yearly basis
  • Profitability by product line

To bridge this information gap, successful companies also generate management reports.

When combined with financial statements, management reports will assist in determining how to improve overall financial results and will help provide an answer to the cash flow question. Management reports, in particular, contain extensive information that is directly related to sales, operational and financial flow.

Some examples of the information found in management reports include:

  • Monthly burn rate schedules
  • Profitability reports by product line, division or customer
  • Financial ratio measurements
  • Financial and cash flow projections
  • KPIs (key performance indicators)

Next page- Key sales operations questions and Next steps to financial success

Alex Hart
Alex Harthttps://hvandpartners.com
Alexander J. Hart of Cuban American decent is principal and founder of Hart Vida Partrners. With over 25 years of experience, Alex specializes in the areas of tax strategy and planning, business process improvement, and capital consulting. Whether advising on capital and financing strategy or consulting for privately-held professional services firms, Alex has the expertise and practical know-how to help any company optimize their business processes and make tactical financial decisions. He began his career at IBM in sales operations and accounting. He was a Controller for the N.Y. Post, has been a CFO for a medical device company, and has written a tax column called “Ask the Tax Guys” for Micro-Cap Review. Alex is a professional member of A.L.T.A. (Affiliated Lawyers of the Americas), a member of the National Association of Tax Preparers, and is a contributing author and mentor at Latin Business Today. Alex graduated from St. John’s University with a B.A. in Spanish and his M.B.A. in Finance. He obtained his accounting degree from Pace University.

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