Cash Flow
How to improve cash flow, in the order that actually works
The problem
When cash is tight, most businesses start with expense cuts because that is the lever closest to hand — and often the slowest to produce cash.
Why it matters
Sequence matters. The first 60 days should come from timing and pricing, not from cutting the capacity you will need in 90 days.
How to know if you have this
- The response to tight cash is always a cost-cutting meeting
- Pricing has not changed while input costs have
- Collections is nobody's specific job
- Financing is used before operating levers are exhausted
How Advisory Motion solves it
- 01Build the sequence: collections and billing first, terms and pricing second, inventory and overhead third, financing last
- 02Attach a dollar value and a timeline to each lever so effort follows impact
- 03Assign each lever an owner and a review date
- 04Track cumulative cash released against the plan every month
Illustrative example
$400K in two quarters, no layoffs
Billing timing, two price corrections and an inventory policy produced the cash the business needed. The cost-cutting plan that had been drafted was never required.
Illustrative composite · not a client identification
Where this connects