UpTrajectory Review
CPA Practice Advisor published a piece on the advisor's role in small-business cash flow decisions, and its core claim is blunt: an advisor does not choose for the owner. The advisor shows, before money moves, what each option does to cash flow. That framing matters because most owners treat cash flow as a report they read after the month closes, not as a forecast they test before they sign, hire, or buy. The article argues the advisor's value sits upstream of the decision, in the modeling, not downstream in the cleanup.
For a small-business operator, this is the difference between driving by the rearview mirror and driving by the road ahead. A lease, a hire, a bulk inventory buy, a new truck: each one commits cash months before the revenue shows up. An advisor who runs the scenarios before the commitment lets the owner see the pinch point — the week payroll and the loan payment land together — and either renegotiate terms, stage the spend, or walk away. Owners who skip that step learn the lesson in overdraft fees and missed supplier discounts.
We agree with the premise and would push it further: the real gap in most advisory relationships is not willingness but tooling and candor. Many advisors still hand the owner a static spreadsheet with three columns and call it a forecast. A useful cash flow model updates with actuals weekly, flags the covenant or credit line that breaks first, and names the assumption most likely to be wrong. If your advisor cannot tell you which input they distrust, you have a historian, not a guide.
The second-order effect cuts two ways. Owners who adopt decision-first forecasting make fewer panic draws on their credit lines and negotiate from evidence rather than hope. But the practice also shifts responsibility: once the owner sees the projection, the choice is theirs, and the advisor's exposure to blame rises. Expect some advisors to resist the shift, and expect software vendors to market 'cash flow dashboards' that automate the arithmetic while leaving the judgment — pricing, timing, risk tolerance — untouched.
Watch for two things. First, whether the article names concrete triggers for a cash flow review: a lease renewal, a hiring plan, a customer concentration above some share of revenue, a loan maturity. Second, whether it addresses the owner who has no advisor at all — most of them — and what a DIY version looks like. A workable minimum is a rolling thirteen-week cash forecast, updated every Friday, with one page of assumptions the owner can defend to a lender.
If you run a small business, bring your next three commitments to your accountant before you sign anything, and ask one question: what does this do to cash in week six, week twelve, and week twenty-six? If the answer is a shrug, that is your answer about the relationship. Build the thirteen-week forecast yourself this quarter, and use it to time your next big spend. The discipline costs a Friday afternoon; the avoidance costs the business.
“An advisor's role is not deciding for owners, but revealing how choices impact cash flow before commitments are made.” — CPA Practice Advisor
Takeaway: Run a rolling thirteen-week cash forecast and test every major commitment against it before you sign.
Excerpt from the original — CPA Practice Advisor
An advisor's role is not deciding for owners, but revealing how choices impact cash flow before commitments are made.