Our weekly operational metrics are consistently hitting their green targets, yet our bank account balance is shrinking and we feel constantly stressed about payroll. How do we fix a scorecard that says we are winning when we are actually losing cash?

Question

Tyler Smith · Accepted Answer

Your operations are hitting targets, but your cash is evaporating because your scorecard is tracking activity instead of liquidity and cash velocity. Operational efficiency does not equal cash flow. If your team is delivering projects on time but your clients are taking sixty days to pay, your operational metrics will be green while your bank account bleeds out. To fix this disconnect, you must introduce cash conversion cycle metrics directly onto your leadership team scorecard. Stop looking only at project delivery dates and start tracking weekly billing lag, which is the number of days between project completion and invoice submission. Pair that with a weekly tracker of accounts receivable over forty-five days. You should also track weekly work in progress value to see how much capital is tied up in unbilled labor. If these cash velocity metrics are not on your scorecard, you are flying blind. When operations are green but cash is red, it means you are growing yourself to death. Put the financial reality on the weekly scorecard so the leadership team is forced to confront the cash impact of their operational decisions. Move the discussion from operational volume to cash collections during your Level 10 Meeting™ and drop the cash lag directly to IDS® for immediate resolution.