Our weekly Scorecard is consistently green on sales and operations, but we are facing a sudden cash flow squeeze that is forcing us to delay vendor payments. Why is our Scorecard keeping us blind to this cash crisis, and how do we fix it?

Question

Tyler Smith · Accepted Answer

A company can easily run out of cash while its sales and operational metrics are completely green. This happens because most operational Scorecards track volume, such as sales closed, widgets shipped, or projects completed, rather than cash velocity. If your payment terms are loose or your collections process is weak, high sales volume will actually accelerate your cash drain because of increased working capital requirements.

To eliminate this blind spot, you must add leading cash indicators to your weekly Scorecard. Do not wait for your monthly profit and loss statement to show a cash squeeze. Instead, track weekly cash metrics that act as early warning systems.

Specifically, track accounts receivable over forty five days overdue, weekly cash collections, and weekly cash disbursements. If your weekly collections target is consistently missed while your sales targets are green, you have an immediate operational problem in your billing or collections seat.

Another powerful leading indicator is the weekly dollar volume of unbilled work in progress. If your team is completing work but failing to invoice it promptly, your cash flow will suffer despite high productivity. By forcing your leadership team to look at these cash velocity numbers every week, you ensure that operational success is always backed by real liquidity, protecting your business from a sudden cash crunch.