SFL - Results

Strategic Financial Leadership, Inc.

Providing the Solid Answers You Need

BY BOOSTING CASH FLOW, LYNCH CUTS A COMPANY’S DEBT BY $2.5 MILLION

Bob Lynch has a common sense approach to solving financial problems.

A health care company was in deep debt, even though it was doing a great job of selling its services. The problem: It was doing a poor job of collecting from insurance companies that covered the costs for patients.

Bob asked a simple question: Why? In many cases, orders were not being filled out correctly and doctor prescriptions were missing, preventing the company from getting paid. No one was following up.

Bob changed that. He had the company focus on turning the sales into cash. Staffers were trained in filling out paperwork properly. Others followed up with physicians to obtain needed Certificates of Medical Necessity. Billings and collections were outsourced to speed collection.

The efforts worked. In two years, the company was able to reduce its external debt by $2.5 million.

phone:513.697.6724

fax:513.697.6726

blynch@sflservices.com

P.O. Box 309

Loveland, Ohio 45140-0309

BANKS RESISTED, BUT LYNCH HELPS NONPROFIT GET $19 MILLION LOAN

Despite huge obstacles, Bob Lynch persuaded a bank to give a church a $19 million loan.

Initially, banks resisted the loan application for a new building because, at first glance, it didn’t seem that the church could repay such a large loan. But Bob prepared financial forecasts demonstrating the church could, indeed, repay the loan.

Looking back 2-1/2 years after Bob prepared the forecasts, Bob was 99.96 percent accurate in predicting how much revenue the church would generate.

Here’s what happened: The church wanted a new “dream” building because its membership was growing rapidly. It planned a fund-raising campaign, using three-year contribution commitments, to pay for the construction and existing debt.

But banks balked at the loan because the church routinely spent every dollar it generated, raised money only through individual donations, did not have an endowment and a similar organization had just admitted to fraudulently using a loan. In addition, church leaders based their budgeting not on their projected cash flow but on their religious calling.

Bob looked at the church’s historical financial data, especially membership growth and weekly donations during services, to create his projections. The forecasting method worked as expected.

Financial forecasting is crucial for any nonprofit or business to do regularly, so it can make changes in its operations as needed. Bob looks at trends in the data to predict the future. It’s something he does extremely well.

“A nonprofit or business has to have some way to predict what will happen,” he says. “Forecasting can prevent a lot of surprises.”