Scaling Up Business with Bill Gallagher

Managing A Positive Cash Flow with Peter Kingma

Apr 10, 2024

Peter Kingma, practice manager for Ernst & Young and author of Cash Is King, sheds light on the balancing act between profitability and cash flow. He discusses how different accounting practices influence cash flow and emphasizes the need for essential KPIs to avoid information overload. Kingma advocates for cultivating a 'cash culture' in organizations, shares strategies for small operational tweaks to boost cash flow, and highlights the importance of storytelling in communicating financial insights.

44:34

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Episode guests

Peter Kingma

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Episode notes

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Quick takeaways

Establishing a strong cash culture throughout the organization empowers employees to understand and influence cash flow effectively, leading to better financial decisions.

Implementing strategic inventory management and revised billing practices can significantly improve cash flow and operational efficiency for sustainable business growth.

Deep dives

Understanding Cash Flow Management

Cash flow management is crucial for the sustainability and growth of a business. Daily decisions made by employees can significantly impact cash flow, but many do not understand how their roles influence the overall financial health. For example, profit does not guarantee liquid cash; a company can be profitable on paper yet struggle to meet short-term cash needs due to inventory issues or delayed customer payments. Recognizing that managing cash effectively allows businesses to breathe easier, make informed decisions, and seize growth opportunities is essential.

Intro

2min

Mastering Cash Flow Management

23min

Streamlining KPIs for Enhanced Decision-Making

3min

Navigating Cash Flow Challenges

10min

Transforming Capital Management in a Profitable Chemical Company

2min

Empowering Businesses through Effective Cash Management

2min

Why is it essential for management to strike a balance between profitability and cash flow for sustained business growth?

In this episode, dive into the world of managing a positive cash flow and scaling up businesses with our insightful guest, Peter Kingma. We also explore the impact of different accounting practices on profit and cash flow, the significance of meaningful KPIs, and the importance of understanding cash flow in decision-making.

Peter Kingma works with multinational clients and leads EY Working Capital services in the Americas. Corporate leaders entrust him to help liberate cash through operational improvements, which help in reducing costs and improving service quality. Peter is also the author of Cash Is King.

Key topics that Bill and Peter explore in this episode:

- Different accounting practices and their impact on profit and cash flow

- The significance of measuring the right KPIs and avoiding information overload

- The impact of disputes in billing and payment on cash flow and potential solutions

- Having a "cash culture" in your organization

- Balancing profitability and cash flow management

- Making small changes in processes and operations to improve cash flow and profitability

- Avoiding comparison to industry norms and seeking improvements outside the industry

- How Peter’s book, Cash Is King: Maintain Liquidity, Build Capital, and Prepare Your Business for Every Opportunity, engages with the concept of managing cash flow

- The value of storytelling in explaining technical subjects

- Making strategic decisions regarding inventory and customer credit

Thanks to Peter Kingma for being on the show!

Get Peter’s book, Cash Is King: Maintain Liquidity, Build Capital, and Prepare Your Business for Every Opportunity.

Amazon US: https://amzn.to/3TWYkts

Amazon UK: https://amzn.to/49ogJ6O

Peter on LinkedIn: https://www.linkedin.com/in/peter-kingma

Peter’s website: https://peterkingma.com/

Bill Gallagher, Scaling Coach and host of the Scaling Up Business podcast, is an international business coach who works with C-Suite leaders to achieve breakthrough growth.

Join Bill in the Growth Navigator Coaching Program: https://ScalingCoach.com/workshop

Bill on LinkedIn: https://www.LinkedIn.com/in/BillGall/

Bill on YouTube: https://www.YouTube.com/@BillGallagherScalingCoach

Visit https://ScalingUp.com/ to learn more about Verne Harnish, our team of Scaling Up Coaches, and the Scaling Up Performance Platform, which includes coaching, learning, software, and summit. We share how the fastest-growing companies succeed where so many others fail. We help leadership teams with the biggest decisions around people, strategy, execution, and cash so that they can scale up successfully and beat the odds of business growth.

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This episode was produced by Story On Media & Marketing: https://www.successwithstories.com