My Mother-in-Law passed away a couple of years ago. Mary wasn’t a business owner, not “from money”, nor a particularly highly educated person and I guarantee you that she had absolutely no clue as to what the expression “cash flow” meant.

But boy oh boy, did she have the concept nailed!

Like many folks of her generation she grew up through some tough times – both economic and emotional. She knew and respected the concept of a fair days work for a fair days pay. Understood the true value of a dollar earned. She also had a primary “mantra” that was hammered home to her children all their lives. “Look after the pennies and the dollars will look after themselves” she would repeatedly preach.

Right up till the end she used a state of the art, all in one, banking, accounting and budgeting tool – the PSB deluxe edition with the WBP+E add on module. Or as she knew it Pink Shoe Boxes with White Bits of Paper and Elastics!

Each pink shoe box was suitably designated (telephone, insurance, savings etc) and every penny that went in to, or, came out of each shoe box (and I mean that literally) was carefully recorded and dated on a white bit of paper. The paper and the shoe box lid were held in place by some very brittle elastics.

The rent and later the mortgage money were always there. The food budget, cash for utility bills and special boxes too – for birthdays, Christmas and Easter and even pink shoe boxes started for her grandchildren’s graduations.

Mary knew where every single penny of her enterprise (her household) was at any given time. And so should you.

Managing your cash flow isn’t simply about collecting as much as you can as soon as you can, or, paying out as little as possible till you have to. True cash flow management is knowing the exact where, when, what, why and how of every single penny associated with your business.

It’s not around how you manage your cash flow but simply doing it. Whether you use a shoe box or a super computer is up to you. It’s about the principles – not the processes, or, to paraphrase my Mother in Law “take care of the small things and the big things will look after themselves”.