Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

Key Number for Cash Flow

16 Feb 2026 · 1 min

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In this short business advice video, the speaker explains that cash flow problems often stem from slow invoice collection. He recommends three practical tactics: (1) secure deposits or upfront payments, (2) keep customers' credit cards on file and charge them immediately after work is completed, and (3) automate payment reminders. He also introduces a key performance metric – the ratio of outstanding invoices to total monthly revenue – and illustrates it with a $100,000 revenue example where $50,000 in uncollected work equals a 50% ratio. The goal is to keep this ratio under 30% daily, ideally at zero, to ensure healthy cash flow.

Chapters

If your business is growing but your bank account isn't, watch this. Cash flow dies when you don't collect fast enough on invoices that you've sent. You can improve this by having a deposit, getting deposits up front, having cards on file, and having automations that send out to remind customers. The thing that I'm always tracking is how much outstanding invoices do I have divided by my total revenue. So for example, if last month I did $100,000 in monthly revenue and I have $50,000 outstanding work that I've completed and should be invoiced, that'd be 50,000 divided by 100,000, that's 50%. I want that number under 30% every day of the week, ideally zero. Where every single time I go out and do work I have a card on file and I'm charging it right away.