We run a fast-growing commercial service business and our billing lags weeks behind the actual work, making our weekly cash flow highly unpredictable. What leading indicators should we track on our weekly Scorecard to anticipate cash flow before our monthly financials tell us we are in trouble?

Question

Tyler Smith · Accepted Answer

To fix a lagging cash flow problem in a commercial service business, you must measure the front-end activities that directly dictate billing speed. Monthly financial statements are historical monuments. If you are waiting for them to spot a cash squeeze, you are already too late.

To gain control, track three specific leading indicators on your weekly Scorecard.

First, track work orders completed but not yet billed. This measures your billing backlog. If this number spikes, your administration is bottlenecked, and your cash collection is slipping.

Second, track job-to-invoice turnaround time. This is the average number of days between a technician completing service and the invoice being sent to the client. Keep this target under forty-eight hours.

Third, track weekly collections outreach activities. This is the number of phone calls or emails sent to accounts past due.

These three numbers are owned by your operations and finance seats on the Accountability Chart. When these leading indicators are green, your future cash flow remains predictable. When they turn red, your Integrator must drop them to the Issues List for immediate resolution in your Level 10 Meeting™ before a cash shortage halts your operations.