Our cash flow is highly volatile, and our finance leader says we cannot predict cash on a weekly basis because client payments are unpredictable. What weekly leading indicators can we put on our Scorecard to forecast and stabilize our cash position before it shows up as a crisis in our bank account?

Question

Tyler Smith · Accepted Answer

Waiting for your bank balance to tell you that you have a cash flow issue is a recipe for disaster. To stabilize your cash position, you must track the weekly activities that occur long before money hits your account. This requires shifting from lagging financial statements to leading operational actions.

Start by mapping your billing cycle backward. Before a client pays, an invoice must be sent. Track the weekly number of invoices generated and the total dollar value of invoices outstanding over thirty days. If your accounts receivable follow-up activity drops, your cash flow will drop three weeks later. Track the weekly number of collection calls or emails sent.

Further upstream, look at operations. If your team is slow to complete projects, they cannot bill. Track a weekly metric like billable milestones completed or project handoff delays. If these operational leading indicators are red, you know with absolute certainty that your cash flow will suffer in the coming month.

Finally, track sales activity. Track the weekly total value of new proposals submitted or contracts signed. By monitoring these upstream activities weekly during your Level 10 Meeting™, your leadership team can spot a cash dip weeks before it registers on your balance sheet. This gives your Integrator and finance leader ample time to adjust spending, push collections, or accelerate sales before a crisis occurs.