A contribution by Stefanie Kurzweil, Owner Semicolon Relations

I admit it honestly: After I had set up my Commitly account and categorised the first transactions, my account lay idle. The reason wasn't that something wasn't working. On the contrary, it was just working too well. The cash flow tool bluntly showed me my cash flow reserves and they were more than meagre. 3 customers had not paid and kept putting me off. Without warning, a large fee invoice remained unpaid, which I had calculated in advance. First for 1 month, then 2 and finally 3 months. But I had long since planned for this income! I was in the middle of renovating my new office. Furniture had already been ordered, the first bills had already been paid and new ones were lurking around every corner.

I also wanted to renew my homepage, which no longer suited me and the company after a year. New functions, new design, new photos for the website and the adaptation to the unspeakable DSGVO were on the agenda. I wondered if the programmer I trusted would accept books as payment - because that still seemed to be my most valuable possession at the time. In short: one look at my Commitly account and tears welled up in my eyes. So better not to get in again - right?

Wrong thinking!

Jürgen Faè, the founder of Commitly, provided a study from the USA at that time. Based on tens of thousands of small business transactions, the vital cash reserves of small businesses were evaluated. It shows that the average small business owner has a cash reserve that lasts for 27 days. In numbers, between US$3,000 and US$12,000, with the majority well into the lower range. My first aha moment: "I'm not alone with my cash flow problem!" A good feeling, because who wants to feel like the only "loser in this world"? Exactly, nobody! This feeling of "I am not alone" was reinforced by another client who announced that the payment of the fee would be delayed for a few days because he himself was still waiting for payment. His words still ring in my ears ....

... The cash flow is a dog! So I even knew someone who felt the same way I did. How reassuring and at the same time my second aha experience.

However, the final aha moment came with a question from Jürgen: Would you rather know now that things will be tight in a month's time or would you have preferred to wait until the cash flow was negative? What a question, now of course! Where the man is right, he is simply right. Now I could still take action and actively manage my Cash position : postpone the website renewal until later, stick to the payment targets but don't transfer the money immediately on the day I receive the invoice, agree installment payments. Because of course I knew one thing: something would come in again and I even knew how much it would be and when.

So open Commitly again and enter exactly these amounts. Add to that my costs for the office renovation, timing the payment of the outstanding invoices. And voilà ... I was back in business.

What have I learned from this?

We humans are emotional - and so are we entrepreneurs! And our sore point is not the budget for the coming year, but the Cash position. But as long as we only deal with it on an emotional level, it only scares us even more - if it is small - because we don't take a close look. Help, only 4,000 euros left in my company account... bang, blinkers, tunnel vision, restless sleep. But as soon as we take out the emotionality and deal with it on a rational, structured level, Cash position is no longer a dog, but a resource that can be actively managed. Commitly removes emotions where they threaten to gain the upper hand and focuses our attention on what we want to achieve. With Cash flow plan in front of me, I know what to do and what not to do. Or to put it another way: I know what I have money for and what I don't. I also know what I will have it for in 2 months' time - or not. Or in 3, or 4 ...

Credits: Photo by Green Chameleon on Unsplash