During a demo of COMMITLY, we philosophized with one of our customers about planning in general and cash flow planning in particular. I would like to record a few points from this exciting conversation here:

3. detach from the operational level

Monitoring open items is very important for a short-term view of Cash position . However, there is very little room for maneuver for entrepreneurs if customer receivables have not yet been received or invoices have not yet been paid. For this reason, we also focus COMMITLY on the medium to long-term period. The aim here is to identify bottlenecks but also room for maneuver 3 - 9 months in advance.

2. avoid false accuracy

But this immediately raises the question: How do I know what will happen in 3, 9 or 12 months? We had an interesting conversation about this at Bits & Pretzels. At this company, this period is planned using project forecasts and assumed probabilities of incoming payments. While the approach is, of course, completely legitimate and also suits this company, we question the effort required for this. Past or empirical values and estimates often lead to a similar result in a shorter period of time.

1. courage to make a mistake

And that leads to the most important point from our point of view. At the end of the day, planning is looking into a crystal ball. VC Tomasz Tunguz once said that it is not about accuracy but about setting priorities, communicating goals, reaching milestones. We share this view. For us, planning is about setting goals and regularly monitoring their achievement. Mistakes are inevitable here. But you learn from mistakes and become better.

Credits: Photo by Frame Harirak on Unsplash