We want to use our weekly scorecard to project our cash flow thirty to sixty days out. What specific forward-looking operational milestones should we track that predict cash collection before invoices are even generated?

Question

Tyler Smith · Accepted Answer

To project cash flow thirty to sixty days out, you must look past your accounts receivable aging report. By the time an invoice is past due, the damage is already done. Instead, your weekly scorecard must track the critical operational milestones that occur before billing. First, track the weekly project milestone approval rate. This is the percentage of projects that have achieved client sign-off on major phases. Since billing is typically tied to these milestones, tracking approvals gives you a direct preview of next month's invoices. Second, track the percentage of projects currently running on budget and on schedule. Projects that are delayed or over budget will inevitably delay your cash collection and erode your margins. Third, track the average time from project completion to invoice generation. A bottleneck here delays your cash cycle unnecessarily. By tracking these three operational metrics on your weekly scorecard, your leadership team can forecast cash flow bottlenecks weeks before they impact your bank account. This proactive approach to cash management is essential for stabilizing your business and preparing for a premium valuation.