As a small business owner, effective cash flow management can empower you to accomplish long-term success. Ensure you’re carefully budgeting and keeping an eye on your big picture goal with these tips from Ryan Larison, Bank of America SVP and Small Business National Sales Performance Executive.




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Narrator:                    Welcome to “The Heartbeat of Main Street” with ForbesBooks at and Bank of America at And here's your host, Greg Stebben.


Greg Stebben:           We're really excited to welcome Ryan Larison here. He's the SVP, Small Business National Sales Performance Executive at Bank of America. Ryan, welcome.


Ryan Larison:            Well thanks, Greg. I really appreciate the invite and the ability to talk to everybody today. Thank you.


Greg Stebben:           Well, thank you, because we're going to talk about something so important to small business owners. In a sense, it's kind of a refresher course for many people, but I think this is the kind of information that is worth hearing and rehearing and reviewing often as a small business owner. We're going to talk about cash flow management. Everyone who owns a business knows what cash flow management is, because if you own a small business it's something you're thinking about all the time. But there are probably some very important aspects of cash flow management that many business owners miss, and I'm hoping you can educate us.



Ryan Larison:             Absolutely, Greg, and effectively managing that cash flow can really empower you to accomplish a few things that will contribute to a long-term success of your business. It does a few things for you. For instance, it allows you to plan for any shortfalls that you might have due to any type of drop in sales or any type of emergency that came up with your business.


Ryan Larison:            So we always recommend to save about six to 12 months of reserve cash. That's a real good rule of thumb. It's also a part of careful budgeting, which includes predicting payables and your receivables and accurately tracking changes in your business, because we all know it can be tough at times and requires consistent attention to detail, but it can ultimately be the difference between success and failure.


Ryan Larison:             And finally, effectively managing your cash flow, it helps you see the big picture of your business and emphasizes your focus on your profits. Ultimately, you need to know what your break point is, and that really gives you a big-picture goal as to what you're working towards, and then you can effectively manage your cash flow to get to that break point and beyond.


Greg Stebben:           It's so interesting, Ryan. In what you just described, it in a sense is very focused on, well in a sense, your relationship with you and your bank account, right? I mean, if I'm planning for shortfalls, I'm setting money aside or making sure that we have money there for if there's a problem. If I'm budgeting, again, it's my small business and my budget. If I'm focusing on profits, again, it's looking at the accounts, talking with the accountant, maybe talking with the bookkeeper.


Greg Stebben:           But there's a whole other side of managing cash flow that is also very important. It's the part of managing your cash flow that involves customers. Because customers are king, customers are queen, but sometimes these relationships can get a little tricky to manage, and you want to make sure those long relationships stay and continue to be great, profitable relationships, and you want to manage relationships with new customers. What are some strategies we can employ to help manage the customer side of cash flow?


Ryan Larison:            That's a great question. And listen, we always want to keep our customers happy, but if the payments are not coming in or they're coming in sporadically, it really can impact your business negatively. So a couple of the strategies that we advise our small business clients to consider include establishing clear terms in your invoices, so you can't fault the customer if they're not paying you if you haven't expressed the terms correctly.


Ryan Larison:            One area you can utilize is maybe some late fees in order to get a great way to spur them to actually start paying off their amounts. Another great way is to accelerate receivables, so by meeting the needs of your most busy customers, one great way is to get a lockbox. We have lockboxes that we utilize that you can mail your payments in and they have faster processing. Or even my favorite, which is an electronic payments portal that is the quickest and easiest way in order to get that payment over to us.


Ryan Larison:             And then finally, this is probably the most important. I like this a lot better than late payments. It's to engage the customer and maybe even have some discounts or rewards for referrals as well as many ways to pay the invoices. So maybe you offer a discount on invoices paid immediately or even allowing your customer to pay via credit or debit card. That's a quick and easy way to get those payments over to you and get those into your hand in a very fast manner.


Greg Stebben:           I love those ideas, especially the idea of incentivizing, as you said, engaging customers and incentivizing them to pay faster, either making it easier for them to do that or even using incentives like discounts and things like that. Because you never know when your customers might also find that as a benefit, and if you don't ask, you'll never find out that that actually could be a great way for you to help manage cash flow.


Greg Stebben:           So Ryan, I want to ask, are there other tips you would want to give small business owners who are nervous about their cash flow? Are there other things you've learned from working with small business owners that might be helpful to our listeners today?


Ryan Larison:             A few more things. So one thing that may not actually come to your mind as a business owner is you can actually creatively schedule your own payables as well. You can negotiate 60 or 90-day payments that may give you a little bit of breathing room when things slow down. And so maybe you have a cycle that's a little bit different than everybody else, and so you just have and communicate with your vendors around a different payment schedule.


Ryan Larison:            Or you can…It can also be helpful to explore options when determining how to handle payables and recurring expenses. So if there is a shortfall, you can keep information like, such as with your loans and lines of credits and utilize those in order to help you through your cash flow.


Ryan Larison:             And of course, we do this at our bank, and I'm sure you do it as a small business owner. It's really important to make sure that you forecast wisely. So when you think about where you're going and what that will mean for upcoming budgets and inflows and outflows, and just be realistic with where you think your business will be and just make sure you forecast correctly, because a good plan can always get you through those tough times.



Greg Stebben:            And I would guess, and I think anyone who owns a small business can identify with this, being surprised is always putting yourself in the worst possible place when it coming comes to managing your cash flow.


Ryan Larison:            That's correct. You want to try to figure out what could come your way and have the best plan possible for those incidences that happen, that just typically will put you in a bad spot, and just have a couple of plans of attack in order to go after it. And communication is always key. In talking with your vendors and talking with your clients, that communication piece can really help you get and utilize cash appropriately.


Greg Stebben:           Well, that is really great advice. He is Ryan Larison. He is the SVP, Small Business National Sales Performance Executive with Bank of America. This is “The Heartbeat of Main Street” with ForbesBooks and Bank of America. And for more great small business tips, check out Bank of America's online small business community at


Greg Stebben:           Ryan, thank you so much for joining us.


Ryan Larison:            Thank you, Greg. I appreciate it.


Speaker 1:                 Thanks for listening to “The Heartbeat of Main Street” with ForbesBooks at and Bank of America at

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