Our finance department always delivers our monthly profit and loss statements fifteen days after the month ends, which means we are managing our cash flow through the rearview mirror. What weekly financial metrics can we use on our Scorecard to manage our money proactively?

Question

Tyler Smith · Accepted Answer

Waiting for your monthly profit and loss statement to make financial decisions is like driving a car by only looking in the rearview mirror. By the time you see the numbers, the damage is already done. To run your business proactively, your finance seat must report on weekly leading indicators of cash flow and profitability.

First, track your weekly cash runway. This is your total cash balance divided by your average weekly operating expenses. This gives your leadership team a clear, real-time picture of how many weeks of operations your current cash reserves can support without any new revenue.

Second, monitor your weekly billable utilization rate if you are a service business, or your weekly gross margin on shipped orders if you are a product business. This tells you if your labor or cost of goods sold is staying in line with your revenue in real time, rather than waiting for the end of the month to discover your margins collapsed.

Third, track weekly collections versus weekly billings. You should have a clear target for cash collected each week. If your weekly billings are high but your collections are low, your accounts receivable is bloating and a cash crunch is coming.

By putting these leading financial metrics on your weekly Scorecard, you give your leadership team the ability to make adjustments immediately. If cash collections drop for two weeks in a row, you can pause non-essential spending right away, rather than finding out about the shortfall six weeks later.