Our sales and delivery metrics are completely green on our weekly Scorecard, but we are facing a severe cash flow squeeze because our collections are lagging. How do we redesign our Scorecard to catch working capital issues before they starve the business?

Question

Tyler Smith · Accepted Answer

A completely green Scorecard on a business facing a cash squeeze means you are tracking the wrong metrics. You are likely focusing on sales volume and project completion while ignoring the actual conversion of work into cash. To fix this, you must add leading indicators of cash flow to your weekly Scorecard.

Do not wait for the monthly P&L, which is a lagging indicator that only confirms you ran out of money thirty days ago. First, add accounts receivable days outstanding to your Scorecard. This should be tracked weekly, with a strict target that reflects your payment terms.

Second, track your total dollar value of invoices older than forty-five days. When this number exceeds your target, it must go red and be pushed to the issues list of your Level 10 Meeting. Third, track work-in-progress inventory or unbilled services. This measures the work you have completed but have not yet invoiced. If unbilled services are climbing, your billing process is broken and your cash is trapped.

By putting these working capital metrics on the Scorecard under the ownership of your Finance seat, you force the leadership team to view operational success through the lens of cash generation. This ensures you maintain the liquidity needed to scale your operations and present a clean, high-value balance sheet to future buyers.