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Business cash management: Tactical or Strategic?

I am always on the lookout for concepts and tools that help businesses and their lenders evaluate how they are doing. And with my emphasis on cashflow analysis of tax returns for lending decisions, cashflow and cash management are subjects dear to my heart.

I found this blog-post by Frank Coker of Corelytics, a company that provides a financial dashboard for business management to support good decision-making.

The Art of Cash Management

In it Frank makes the case for moving from a tactical approach common to most small businesses (can I pay my bills next month) to a strategic approach to have sufficient cash to pay bills, grow the business, and withstand short-term challenges.

What is wrong with tactical?

Admittedly, during the recession, I narrowed my focus to tactical. At one point we updated our six-week cashflow on a weekly basis to stay on top of cash needs. Happily, as my business has recovered to pre-recession levels and better, i no longer have to take that short-term tactical focus and am expanding back into a more strategic approach.

Is selling the business an important part of your borrower/guarantor’s plans?

Then a strategic approach to cash management is a critical component. As the business lender, do you know which approach your business borrower/guarantor is taking?

About the Author
Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis. She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans. Creator of the Tax Return Analysis Virtual Classroom at, she speaks at banking associations on risk management, lending and director finance topics.