Practical guidance
Financial playbook
A starting point for deciding what to measure, what to change, and where help could be useful.
1. Separate cash from profit
A sale can appear in revenue before the customer pays. Review actual receipts, payments, receivables, inventory, and upcoming obligations alongside the profit-and-loss statement.
2. Look at margin by line of business
Compare revenue with the direct costs of each product, service, or client. Use consistent cost definitions and check whether profitable work is subsidizing loss-making work.
3. Count the full cost of labor
Include salary, employer taxes, benefits, and relevant overhead. Distinguish paid hours from productive or billable hours, and account for leave and non-billable work.
4. Review pricing and scope together
Compare realized revenue with the work actually delivered. Discounts, extra revisions, and unbilled time can change the economics even when the headline rate stays the same.
5. Follow the working-capital cycle
Look at how quickly customers pay, how long inventory is held, and when suppliers must be paid. Growth can require cash before the resulting revenue is collected.
6. Build a short weekly review
Review cash, upcoming payments, overdue receivables, revenue against plan, and a leading operating measure. Investigate changes and assign the next action. Choose thresholds for your circumstances rather than relying on a universal benchmark.