Controllers Council recently held a panel discussion on Rethinking Cash Flow Management, sponsored by BILL.

BILL is the leader in financial automation software for small and mid-size businesses. our expert panelists are Ken Fick and Joe Fleischer. Ken Fick is President and CEO of FPAexperts that provides FP and A of course, but also budgeting and related services with more than 20 years of experience in both corporate finance and consulting. Ken is a frequent contributor to media outlets on variety of corporate finance and accounting topics. Joe Fleischer is Webinar Content Marketing Manager for Bill. And Joe has more than 16 years-experience, including and Aga.

Following are key takeaways to this discussion. If you are interested in learning more, view the full webinar archive video here.

Q: What have you seen as the most significant challenges that both small and mid-size businesses are encountering, not only with sustaining but perhaps improving access to capital?

A: There are several key areas that I think are more poignant for small and medium-sized businesses. The areas include:

  1. Limited choices
  2. Limited credit histories
  3. Lack of collateral
  4. Cash flow issues
  5. Rising interest rates
  6. Limited resources

Q: How can small and midsize businesses improve flexibility regarding payment terms as well as payment options in collaboration with suppliers and vendors?

A: Establishing greater flexibility with payment terms and payment options among suppliers and vendors can be a significant challenge for many small and medium-sized businesses. There are several reasons for that, but I’m just going to step back just a little bit, and I think what I see a lot of times in the smaller market is they think they’re an island or they think they have to act like IBM. Some ways to improve flexibility with suppliers and vendors include:

  1. Discuss payment terms at the outset
  2. Ask about early-payment discounts
  3. Explore financing options beyond bank loans
  4. Offer multiple payment options to customers

Q: What types of cash inflows and cash outflows are small and midsize businesses likely to overlook in the midst of preparing budgets?

A: I know we’re talking about small and medium sized businesses, but it’s all businesses. And I go back to saying it’s not a loan, missing a budget item or missing a cashflow item. I’ve seen very large businesses completely drop the ball on it and they have hundreds of MBAs working there and accountants. It’s not a small company or solely a small company problem. We all get myopic, and we don’t think in a forward-looking perspective. A lot of the companies that I work with are accounting base, which is great, it’s not a bad thing, but that’s backwards. When you’re looking at cash flow, you’re trying to understand what could happen based on exterior assumptions, more like a forecast.

The types of cash inflows and cash outflows businesses are most likely to overlook include:

  1. One-time expenses
  2. Seasonal fluctuations
  3. Nonseasonal fluctuations among variable expenses
  4. Customer payment delays
  5. Debt service payments

Q: What advances can small and mid-size businesses apply in technology to maintain visibility into and control over cashflow?

A: In this area for automation, even though it may not feel this way, I think the SMB world is at more of an advantage than the Fortune 500. Because you can literally go buy things off the shelf, and the software has been tested. A lot of times you need to work really a customized solution because you have multiple systems that are feeding into and out of it. The range of automation opportunities are extensive in this space. In addition to, generally anywhere there is a consistent or can be documented a consistent plot process to be applied, automation can be brought into it. So, any type of process within the enterprise. The biggest one I see is really implementing electronic invoicing. The other areas include payment processing, cash management, and financial reporting and planning.

Q: What key performance indicators (KPIs) should small and mid-size businesses should look at, especially as they’re maturing?

A: There are 6 areas that SMBs should really focus on when evaluating cash flow. Those areas include:

  1. Operating cash flow: It’s a measure of the cash generated by a business operation. So positive operating cash flow indicates that the business generating sufficient cash to cover its operation expenses and invest in growth. So, I suggest making a chart. Is that increasing? Is it decreasing? Is it by week, is it by month? Is it by year? Just look at the operating cash flow to understand those fluctuations and understand that the seasonality comes into play.
  2. Duration of the cash conversion cycle: The time it takes for a business to convert inventory and an accounts receivable into cash. The faster you can do that, the better you are.
  3. Accounts receivable turnover: Account receivable will turn over just like the cash conversion cycle. How long is it taking you to collect your receivables?
  4. Days sales outstanding (DSO)
  5. Days payables outstanding (DPO)
  6. Free cash flow: You have the operating cash flow, okay? Then you’re going take out cap expenditure and other investments.

Q: What would you advise finance leaders at these organizations regarding monitoring and acknowledging the interdependence of these metrics that we just discussed?

A: Businesses are just a group of people and you’re going to hold; the executives or leaders should hold people accountable to certain goals. And one of these goals within their performance management system should be some type of cash metric or measure, especially at the smaller. When you get larger, your capital structure is dependent on a lot of things. It can actually have a treasure, it’s a lot more complex. But in the smaller and medium-sized business, it’s not, it’s closely tied to revenue and to operating profit. Looking at that and looking at the perspective of that, I think is going to add the greatest value to them.

To view the complete webcast, download full webinar here.


BILL (NYSE: BILL) is a leader in financial automation software for small and midsize businesses (SMBs). As a champion of SMBs, we are dedicated to automating the future of finance so businesses can thrive. Hundreds of thousands of businesses trust BILL solutions to manage financial workflows, including payables, receivables, and spend and expense management. With BILL, businesses are connected to a network of millions of members, so they can pay or get paid faster. Through our automated solutions, we help SMBs simplify and control their finances, so they can confidently manage their businesses, and succeed on their terms. BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers. BILL is headquartered in San Jose, California. For more information, visit