Key Podcast Highlights

What Two Cash Flow Reports Should You Use Regularly?

1. Cash disbursements by vendor: You should sort this report from highest down to lowest, which basically means you’ll look at all of the cash disbursements that you are spending with your vendors.

2. Cash receipts by customers: This report helps you understand who your best customers are.


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Gene (00:01):

Hey everybody, it’s Gene Marks and welcome to another episode of the Hartford Small Biz Ahead podcast. Thank you so much for joining me. As an accountant and as a business owner, as a journalist who covers small and mid-size businesses, for years I’ve been sort of obsessed about different metrics and financial reporting and what we need to be tracking to make sure that we’re running our business the right way. And I’ve got something a little bit revelatory that I wanted to share with you today, which has to do with reports. I know that when you run your business and you’re watching your cash flow, you got a lot of different advice about the different types of things that you should be, keeping track of, which is fine. I mean, yeah, you should be getting a monthly financial statement.

Gene (00:43):

I think it’s good for you to review your general ledger. I think having a flash report that tells you daily or weekly what your cash is, and receivables and payables and other key metrics, very, very important as well. But, when I review my company’s cash, when I review my expenses, what I’m spending money on and over the years as I’ve been advising my clients, I’ve gravitated towards two reports, both for expenses and also for sales. Just two reports, which have become so important to me that they’ve almost become more important than some of the other reports that I’m using to run my business. So let me lemme explain to you what they are. They’re very similar, but they come from different angles. The first report has to do with your expenses. Now, how do you know if you’re keeping an eye on expenses and you’re spending the money in the right places, and that you’re not spending too much here and there, right?

Gene (01:33):

How do you really know that? Well, you can dig into your general ledger, but here’s the report that I want you to be getting from your accounting system. Okay? Do this every six months, just every six months, twice a year. The report is this, it is your cash disbursements by vendor. That’s what it is. And I want you to sort it from highest down to lowest, which basically means I want you to look at all of the cash disbursements that you are spending with your vendors when you generate this report. Take a hard look at it. It is eye-opening and it is very revealing. And also it puts all the information you need into one place. When I look at my cash disbursements by vendor, these vendors immediately jump out to me. If I don’t know any vendors, obviously I’m like, who the heck is that?

Gene (02:26):

And I can ask about it. But oftentimes I see vendors that I do know and I start thinking to myself like, I’ve spent this much with this vendor over the past six months. Or why am I spending this much with this person? Or, I thought actually I was gonna be spending more here. When you narrow down your business to the people that you’re doing business with, the people that you’re spending money on, rather than the accounts that they’re going to, it will be so much more relevant to you when you’re analyzing your expenses. So try that out. In fact, go to 2023’s books. Ask your accountant or your controller or your accounting manager or maybe yourself. Trust me when I tell you, there is a report available in your accounting system that will have cash disbursements by vendor.

Gene (03:18):

Okay? Run it and sort it from highest down to lowest and read that report. And I bet you as you go through that report, you’ll start thinking to yourself, maybe I need to make some changes or I wasn’t expecting to see this. Or why am I spending money on that? We should probably cancel it. It’s been very instrumental. That’s on the expense side. Now the same thing has to do with revenues, but here’s something a little bit different on revenues. Your accounting system can also generate your report that’s cash receipts by customers. Very similar cash disbursement by vendor, but here, cash receipt by customer. And then do that by ascending. The biggest down to lowest. First of all, you’ll really understand who your best customers are because they’ll be on the report. And some of it might be a surprise.

Gene (04:07):

In fact, when I run that report, I look at it like, “wow, I didn’t even realize that client paid me that much this past year.” I wanna make sure I’m giving this person extra special attention or if I’ve been grateful enough or maybe we should be providing more services or a higher level of service or selling ’em other products. So look at those revenues by customer on a graduated scale. But here’s the only added twist to this one, if you can and most accounting systems will allow you to do that. Set up your report to show a comparison. You wanna know how much revenue you’re getting by customer this past year. You also wanna know what that revenue was the year before because if that revenue is significantly down from what it was the year before, you wanna know about that, don’t you?

Gene (04:56):

And if your revenue is up a lot from what it was the year before, well you’re gonna wanna know about that as well. So not only ask for cash receipts by customer for this year, when you configure your report, have it show you the cash receipts from last year as well as a comparative so that you can really see which direction those customers are going. I am telling you guys, all these financial statements, all these reports, the general ledger metrics, all that stuff, yeah, I get it. It’s important. But it’s just over the past couple of years, I have been leaning heavily into these two reports. My cash disbursements by vendor and my cash receipts by customer. And I’ve been looking at them just twice a year, every six months. And they have made a huge impact on how I run my business.

Gene (05:40):

And I wanted to share that with you because I think it can make a huge impact on how you run your business as well. My name is Gene Marks and you’ve been listening to this week’s episode of the Hartford Small Biz Ahead podcast. I hope you found this advice helpful. If you need any more advice or help or assistance, please visit us at I’ll be back next week with another episode, some other advice that I think I can impart that hopefully will help you run your business. Hope this was helpful too. We’ll see you again in a week. Take care.

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