Finance
7 min read
Cash is a lagging indicator
By the time cash gets tight, the cause is three months old. These are the earlier signs we watch instead.
Priya Nair
Partner, finance
Owners watch the bank balance because it is the number they can see every day. It is also the last number to move.
Watch the order book
Orders in hand, and how long they have been in hand, tell you next quarter’s cash today.
Watch how long customers take to pay
A creeping payment time is often the first sign of a customer in trouble, and of you not chasing.
Watch your own promises
Every quote you have given but not delivered is a claim on your cash. Count them.
The Aldermere Letter
One essay a month, short enough to read on the train.
Keep reading
More from the Quarterly.
Strategy
The three-line strategy: a test for any plan
If a strategy cannot be written in three lines, it is not a strategy yet. Here is the test we use on every plan we are shown.
Reporting
Why your monthly report is not helping
A monthly pack of forty charts tells you what happened. It rarely tells you what to do. Here is how to cut it to one page.
People
Hiring your first head of operations
The founder who has done everything is the hardest person to replace. Here is how to hire your first head of operations, and how to let go.
Want this applied to your business?