Baggy pants were never so hot. You have to trust us on this.
It’s impossible to explain exactly how popular rapper MC Hammer was in the early 90s if you weren’t there. We’re talking a full-blown, worldwide phenomenon.
MC Hammer’s “U Can’t Touch This” blared on every radio station. His videos, complete with signature Hammer pants and flashy dance moves, are a regular feature on MTV. And the enormous, expensive tours were next. They were spectacles.
But there was one big problem.
MC Hammer (aka Stanley Burrell) might have earned around $70 million dollars. But – plot twist – a few years later, he was bankrupt and drowning in $13 million dollars of debt.
What went wrong? The answer lies in two words: cash flow.
With Hammer’s lavish lifestyle, extravagant spending, and poor cash management, financial failure was inevitable.
Sounds familiar?
We’re not saying you’re out spending your money on metallic pants and 50 dancers and mansions with gold-plated front gates. Maybe you are (no judgement).
But we’ll bet as a CFO in the IT Services industry, you might be dealing with your own version of “Hammer Time.”
Unreliable numbers, late and incorrect payments, and unexpected costs can all lead to cash flow challenges that threaten your company’s financial stability.
What Causes Cash Flow Problems?
Most departments in an IT Services business will have processes that can slow down cash flow.
For the finance department, one of the biggest contributors is late or delayed billing. It’s a common problem because most teams simply don’t have the resources that they need to ensure every customer gets their bill without delay and as early as possible.
(And there are those pesky timesheets that need to be approved before bills can be processed. Hopefully mentioning them hasn’t sent your blood pressure through the roof).
An inefficient payment collection makes this even worse. Customers have diverse needs and preferences in terms of how they want to pay. But the finance team must be able to keep up with these methods to keep that cash coming in. Problem is, they usually aren’t given the tools to do so.
And that can mean serious stress for you and the business.
How Cash Flow Misery Hurts You and Your Company
Cash flow problems inevitably lead to big challenges, including:
1. Failure with Ops
When there isn’t enough cash around, there’s going to be disruption in everything from payroll to buying inventory and paying for ops overheads. Not only does this put the business at risk, but it makes employee morale crash.
2. Crushed growth
If you don’t have enough cash, it’s going to be hard to invest in anything that helps long-term growth. Things like market expansion, product and service development, strategies to improve customer relations, or hiring key talent are necessary for future growth and staying competitive.
3. Damaged reputation
The last thing you need is both customers and creditors giving you a bad reputation. Late bills won’t make customers happy. And if you haven’t got the cash flow to pay your bills and make your customers happy by solving problems immediately, you and your company will be in trouble. So will your standing in the industry.
4. Investors will run away screaming
Okay, maybe they won’t scream, but they won’t stick around. Investors always look closely at cash flow to measure a company’s financial health. If you struggle with the flow, investors will go.
5. Big financial risks
CFOs always know to expect the unexpected. Financial shocks happen (boy have we learned that over the last few years!). If your cash flow suffers, you’ll be vulnerable to these financial shocks. It will be a lot harder for you to survive.
6. More strain on you
It’s hard enough being a CFO in the best of circumstances – the stress list is LONG. But without cash flow, you’re getting it from all angles and – BAM – you’re not sleeping and you haven’t seen your family or friends in months. How are you supposed to focus on financial strategy when you’re putting out fires all the time?
Cash Flow Management: What we can learn from MC Hammer’s mistakes
When the beat of cash flow turns from a sweet groove to a discordant thump, it’s not just you who feels the pain.
Because everything that Finance does has a domino effect, your whole company can suffer.
The good news is that there’s a way to turn this mess into something spectacular, just like MC Hammer at his best. You can keep the money rolling in smoothly, just like a melody.
It’s all down to the right strategies. Here are the ones that work best for our CFO clients and partners:
1. Better forecasting
The most precise the forecasting, the better your ability to stategize and make the best financial decisions. Good forecasting cuts down on human error and helps with financial planning.
2. Streamline billing
The simpler your invoicing and billing process, the easier your life. Use a system that processes timesheets faster, generates and sends invoices promptly, tracks the payments, adjusts when necessary, and remembers overdue bills. A good system will cut down the hours spent on billing.
3. Payment solutions that your customers want
The easier the payment process for your customers, the more you’ll get paid. Offer multiple payment options to cater to what they want. That improves the customer experience too, which will enhance cash flow in the long-term.
4. Cut your overheads
This is the biggest strategy MC Hammer should have used. You must cut your outgoings as much as possible. We don’t mean stop providing tea and food to your staff or cut their wages. We mean cut labor costs and overheads by streamlining your end-to-end so that your staff aren’t wasting time on tasks they shouldn’t have to do. You’ll make a lot more money when they’re free to do what they do best – sell, strategize, develop, and innovate.
Now you might be thinking, “Sure, I’d love to wave a wand and have all these things, plus the gold-plated front gates (and some big Hammer pants thrown in for good measure). But we can’t always get what we want.”
Yes, you can.
Here’s something that will be music to your ears
You can enjoy all the good stuff that steady cash flow brings. You can put every one of those working strategies into motion and get rid of your problems for good. You just need the right tool.
MC Hammer didn’t have one solution that could turn everything around. You do.
And that solution is automation of your financial processes. Specifically, an end-to-end process that takes care of everything for you.
Automating your finance functions will transform everything, radically enhancing your financial management capabilities.
This means everything from sales like the terms, usage rates, prices, payment times, etc. gets processed in your system and brought to your team ready to go. (Our solution can’t eliminate those timesheets altogether, but we can make you a lot more confident in the numbers, so they’re signed off faster).
Invoices are created automatically. Bills are sent automatically. Payments are processed fast and automatically.
In other words, automation lets you finally do the job you were hired to do, because you no longer have to worry about the stuff you shouldn’t have to.
You’re the CFO. You’ve got a lot on your shoulders.
Why suffer with more than you have to? Why not give yourself the gift of cutting-edge innovation – the same gift you give your customers?
You can end cash flow misery and bring a new era of financial stability and growth.
You can have a comeback tour because unlike MC Hammer, you have the power of automation at your disposal.
So put those metallic virtual Hammer pants, take control of your cash flow, and dance your way to success. Because when it comes to managing your company’s finances, you can touch this – and you can master it.
Supercharge Your Cash Flow with Bluefort
Are cash flow challenges haunting your IT Services company? Don’t let your finances slip into “Hammer Time” chaos. Bluefort Solutions is your key to financial stability and growth.
Here’s how we can help:
Precision Forecasting: Say goodbye to financial uncertainty. Our cutting-edge tools provide accurate forecasts, empowering you to make informed decisions with confidence.
Streamlined Billing: Save time and reduce errors. Our automated invoicing and billing system processes timesheets swiftly, sends invoices promptly, tracks payments, and manages overdue bills efficiently.
Customer-Centric Payments: Enhance the customer experience by offering multiple payment options. Increase your cash flow while keeping your clients satisfied.
Cost Optimization: Streamline operations, cut unnecessary overheads, and maximize your team’s productivity. Let your staff focus on what they do best – sell, strategize, develop, and innovate.
Unlock the Power of Automation
Imagine a finance process that handles everything for you – from sales data to invoicing and payments. Bluefort offers an end-to-end automation subscription management solution that empowers you to focus on your CFO responsibilities without the hassle.
Our automation solutions will revolutionize your financial capabilities, ensuring accuracy and efficiency in every aspect of your finances. Leave the manual work behind and embrace innovation.
With Bluefort, you can leave cash flow challenges behind and pave the way for a future of financial stability and growth.
So, Dance Your Way to Success
Unlike MC Hammer, you have the power of automation at your disposal. So put on your virtual Hammer pants, take control of your cash flow, and dance your way to success.
