Ep. 022 Interview Series: David Safeer on How to Uncover the Real Problem with Cash Flow Issues
April 23, 2023
Mastering Cash Flow: Myths, Mindsets, and Strategies for Business Success. In this episode, we interview David Safeer, the founder of "Cash Is Clear", a company that specialises in helping businesses manage their cash flow. David shares his journey, starting from his early days as a technician, to his global marketing position, and ultimately becoming an expert in cash flow management.
David debunks two common myths surrounding accounting and finance: that accountants should know how to manage cash flow and that it's all about the money. He stresses the importance of commercial awareness, sales, marketing, operations, and predicting and managing the future.
David has developed a system with six pillars to teach accountants how to help their clients with cash flow problems. The first pillar is mindset, which is the most critical issue. He emphasises that it's not enough to analyse the past; it's also crucial to be proactive in creating the future. The goal is to help companies stay in business and grow as much as they can.
David also talks about the importance of bookkeeping and clean set of books for understanding costs, margins, and predicting cash flow in the future. He explains that changing the mindset of traditional accountants who are trained to think and behave in a certain way takes time, but it's crucial.
The conversation also focuses on the challenges of working with lenders who want to lend to companies that have a decent cash flow but waste the finances on unnecessary expenses. They discuss the role of data analytics in the evolution of cash flow modeling and how fintech can offer solutions but won't solve the problem entirely.
Summary
Join us in this episode as we dive deep into the world of cash flow management, and learn the myths, mindsets, and strategies to master cash flow for your business success.
David highlights that cash flow issues are generally an emotional issue and require behavioral-based processes to overcome them. He recommends communication as the key to getting the message across and suggests using plain English for easy understanding.
Key insights:
- Managing cash flow is crucial for any business, and it's not just about historical data but also about commercial awareness, sales, marketing, and predicting the future.
- A mindset shift is needed to move from accrual-based accounting reports to cash-based reality.
- Safeer has created a system with six pillars to teach accountants how to help their clients with cash flow problems. The first pillar is mindset, which is the most critical issue.
- Bookkeeping is essential for understanding costs, margins, and predicting cash flow in the future.
- Traditional accountants who are trained to think and behave in a certain way need to change their mindset to master cash flow management.
- Communication is the key to getting the message across, and using plain English for easy understanding is crucial.
- Identifying the right KPIs is critical for any business, and vanity metrics can cause cash flow problems.
- Cash flow issues are generally an emotional issue and require behavioral-based processes to overcome them.
- Financial discipline and scrutinizing investments and short-term discretionary spending are essential for managing cash flow.
- While fintech is great, there are no silver bullets, and financial discipline is essential to solve cash flow problems.
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