How to Control Cash Flow & Grow Your SMB

Small business owners like Todd Murphy of Universal Information Services are passionate about their mission, their people and their values. But everyone faces stressors and niggling admin in their day-to-day operations. Learn how Murphy went from simply tolerating cash flow management to realizing its potential to help his business innovate and grow.

Like so many small business owners across America, Todd Murphy brims with enthusiasm when describing his team and how he serves his customers in the public relations industry.

As CEO of Universal Information Services, he helps companies understand how they are perceived by the public — and their competitors — by combing through all the media mentions from broadcast, web, social and print sources and bundling it into reports that are delivered to customers each morning via email.

Universal has evolved constantly in its more than 100 years, but its core values have endured. It was a veteran-owned business and 15% of its workforce are veterans. Murphy enthusiastically spoke of his relationship with his local business banker at First National Bank of Omaha.

Murphy also is one of Centime’s earliest clients. Listening is at the heart of one of Centime’s own core values: our unrelenting devotion to serving clients. They are our best teachers; from them we gain insights and understanding into what small and mid-sized business leaders face as they run their businesses, innovate and grow.

“We are entrepreneurs. We are innovators. We are idea people. So access to information in the fintech space is critical,” Murphy said. But he noted that a relationship with a bank — like the deep, long-running tie he has to FNBO — is equally important. He’s seen personally how the two can work together: “I’ve seen a few posts, primarily on LinkedIn, that indicate fintech and the future of fintech dictates such that you won’t know who your business banker is in the future. That’s ridiculous. And the pandemic proved that if you don’t have a relationship with somebody at a financial institution, your access to credit or even access to counsel is almost wiped out.”

The following grew from an authentic conversation with Murphy about how we might be able to understand the issues he faces every day in his business.

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A bold vision, a passionate leader

Universal Information Services’ customers want to know how they’re seen, and Murphy and his team deliver reports encompassing mentions across traditional and social media.

“It could be legislative issues or regulatory issues that are coming up that could impact our clients or simply the scope of exposure they received for an announcement.. They get a report each morning at 8 am, outlining the stories in the last 24-hour media cycle,” Murphy said, his passion for staying on top of a fast-paced operation immediately apparent. His clients, including Brazil’s Petrobras and credit-scoring model VantageScore, rely on these analyses to make crucial decisions.

But every job has admin, even a chief executive’s. And Murphy’s tone noticeably changes when he talks about managing finances and controlling cash flow.

“I will say managing the financials is like dental care. I’ve got to do it because if I don’t do it, the rot inside my company begins. And before I know it, I could be toothless. I could have holes in my services. I could have cash flow that doesn’t sustain the services that I’ve promised to our customers.

“Managing financials for me […] I’ve got to do it. I don’t necessarily enjoy it. Day-to-day, I don’t think any person who is driven by innovation and performance at their company level wants to get into the weeds on their finances.”

Cash flow to Murphy is critical, and a consistent stressor — despite the financial health of his business.

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Glancing in the rearview mirror? Or getting ahead of the problem

Murphy makes cash flow predictions based on his past experience. After all, past is prologue, right? Well — not always.

“Historically, at least my company, and if I am an average representation of businesses like mine, we operate with the rearview mirror,” Murphy says, describing seasonal components of his operations, such as a typical lull in August when PR professionals tend to take vacation. And yet, he continues, “Everything matters, everything counts. And because I was good yesterday does not matter tomorrow.”

Although Murphy described managing his financials as a necessary chore, and a strenuous one at that, he perked up at the idea of getting a better handle on cash flow forecasting. “That’s the hope for a person like me, an average, small to mid-sized business owner, executive operator,” he said, “getting to a point in time when projecting my cash flow is interesting and simple and accurate.”

“If I have access to financial data that helps guide me for tomorrow. That would be a very useful tool and no longer thought of in my mind as sitting in a dental chair.“

So how does someone like Murphy take stock of his inflows and outflows currently? It depends.

“I know that I’m going to have payroll twice a month. That’s an easy one. I don’t need new software to tell me that I know when payroll is going to come up,” he said.

“But what happens in the week after the payroll? How does cash flow look after that? And can you help me predict what it will be? How can you help me understand what the weeks after payroll will look like? Once I can plan, I can have a process and that lets me innovate faster, provide better product and service to my customers.”

Many of the questions Murphy raises hinge on accounts payable and accounts receivable, as well as improving forecasting.

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Getting paid faster, and paying smarter

Accounts payable and accounts receivable help define a business’ cash flow, and receivables can be tricky since others’ behavior is out of the typical SMB leader’s control.

Murphy articulated how he and leaders like him tend to come to an understanding of how their cash flow puzzle fits together. He described how he first got a better handle on accounts receivable: “In the past, some clients weren’t paying us on time and that was reflected in our bank account. We’ve billed a lot of people. We’ve billed a lot of money. Our revenues are high, but our cash in the bank is low. And that [is] when companies like mine decided to change that and say, ‘Okay, we’re now actively going to collect. We’re going to identify those who are 30, 60, 90 days past due and go get that money. ‘“

Without robust forecasting, managing collections is still a rearview mirror-oriented perspective. When it comes to payables, there’s another, equally important set of calculations Murphy and others like him make.

“I don’t think there’s any owner that wants to pay out all of their money immediately to their vendors. […] Small business wants to hang onto their money for as long as they can keep the money working. That’s part of what small to midsize businesses do.”

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Credit: Who can get it when they need it?

In considering the broader SMB community and access to credit, Murphy took a broad view on how fintech will affect whether small business leaders can access credit when they need it, and how much access to that form of working capital will cost.

“For me personally, access to credit hasn’t been a problem. My company is established. We’ve been in business for over a hundred years. We’re a known entity.”

“I’m an average old white guy. Credit hasn’t traditionally been hard for my demographic. If I was almost any other demographic, it might be different. In my business I see the stories about biases and the lack of equity in lending.”

Evaluating the true financials past, present and future of small and mid-sized businesses has the potential to create substantial value in the economy.

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Get excited again

After talking through the highs and lows of running Universal Information Services, Murphy came around, audibly excited about engaging with his company’s financials and what controlling cash flow would allow him to do — whether it was “knowing which week of the month to make a large acquisition” or ”leaving money in my pockets.”

“I’m more interested in how I can keep money in the pocket of the company, which lets me do things like give raises and invest in the company. And more importantly, prevent me from making costly mistakes I would otherwise make without the predictability of my cash flow.”

“Now we’re back to the exciting part.”

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Join the #Centeam

In addition to relentless service to clients, teamwork is another of Centime’s three key values.

Early Access Program participants embody both. We consider them teammates as much as our colleagues. They help shape our solution while receiving highly personalized service in return — at no cost to them. If you or your business is interested in trying our solution for free, and with the close assistance of a dedicated onboarding team, email sales@centime.com or book a demo here.

*Parts of this interview have been edited for concision and clarity.

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*Centime may provide support services to FNBO, as permitted by applicable law, to facilitate the delivery of its bank products and services.

**Deposit placement through ICS is subject to the terms, conditions, and disclosures in the applicable agreements. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one destination bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA (e.g., before settlement for deposits or after settlement for withdrawals) or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through ICS satisfies any restrictions on its deposits. A list identifying IntraFi network bank

Control Cash Flow, Control Your Small Business

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