In our experience, companies rarely run into trouble for lack of reports: they run into trouble for lack of control. These are the early signals that control is slipping, long before the account runs dry.
Watch for these signals
1
Managing by bank balance
Decisions rest on today's balance, with no forward view of what is coming.
2
No forecast at all
There is no forward picture of cash, so every surprise arrives at full force.
3
Collections keep slipping
Customer payments run late and nobody owns the chase.
4
Ad hoc spending
Money leaves the business without a plan or a control on it.
5
Overstocking
Cash sits trapped in excess inventory that is slow to convert.
6
Ignoring seasonality
Predictable highs and lows still catch the business off guard.
7
Debt without a plan
Borrowing happens with no clear path to repay it.
8
Reacting too late
Cash pressure is noticed only once it has already arrived.
9
The illusion of control
Tools exist, but they create a feeling of control rather than the real thing.
The Bottom Line
Every sign on this page is a chance to act early. The cost of noticing late is usually higher than the cost of looking ahead.
The information in this document is for educational purposes only, based on FinPro's experience. It does not constitute financial, legal, or tax advice. Please consult a qualified professional before making decisions.