Our sales and project delivery metrics are entirely green, yet our bank account is constantly empty and we are burning through our line of credit. What leading cash flow metrics are we missing that explain why a green scorecard is hiding a cash crisis?

Question

Tyler Smith · Accepted Answer

A green scorecard and an empty bank account is a classic sign of tracking the wrong metrics. If your sales and delivery metrics are green but your cash is dead, you are likely tracking volume instead of velocity and cash conversion efficiency.

To solve this cash blind spot, you need to add three specific leading indicators to your weekly scorecard.

First, track work in progress to billing lag. This is the average number of days between finishing a block of work and actually sending the invoice to the client. If your project delivery is green but your billing department takes three weeks to send an invoice, your cash flow will choke.

Second, track collections activity. Do not just track accounts receivable over ninety days, which is a lagging indicator. Track weekly collection outreach. This means measuring the number of past-due client accounts contacted by your finance team each week.

Third, track client onboarding delays. Measure the number of days from a signed contract to the first deposit received.

If your sales team is closing deals but client payments are delayed because of contract negotiations or slow deposit invoicing, your revenue numbers look great while your cash position drops.

Make sure your finance seat on the Accountability Chart owns these metrics and brings them to the weekly Level 10 Meeting™. A healthy business requires both operational volume and rapid cash velocity.