Most owners who say "we have a cash flow problem" don't.
What they have is an invoicing problem. They are doing the work. They are entitled to the money. And they are extending their customers a 90-day interest-free loan by accident.
The bank account just tells you the bill is overdue.
The math nobody runs
Take a service business that finishes a job, takes 45 days to send the invoice, then waits 60 days for the customer to pay.
That is 105 days from "we did the work" to "the cash is in the bank." Three and a half months. On a $5M business, that is roughly $1.4M of your own working capital sitting on your customers' books at any given moment — most of which is your responsibility, not theirs.
This is why owners with growing businesses end up putting personal cash in to make payroll. Not because the business is unprofitable. Because the business is funding everyone else's cash flow.
Why this happens
It is almost never financial. It is operational.
- The delivery team is too busy to package up the job for billing.
- The billing process requires three approvals and a project manager who is on a site.
- Nobody owns the collections call when an invoice ages past 30 days.
- The line of credit feels like a buffer, so the urgency never materializes.
None of these are CFO problems on paper. All of them have to be solved by a CFO who understands the operational reality.
How to actually close the gap
Three changes, usually in this order.
- Invoice three to four times a month instead of once. The work-to-cash clock starts earlier. Customers get bills in smaller, more frequent chunks they can pay against. This single change usually pulls a week or more of cash forward.
- A real collections process. Someone owns each overdue invoice. Calls happen on a schedule, not a hunch. Most owners are surprised at how much money is sitting in receivables that nobody is actively chasing.
- Restructure the LOC. Most lines of credit are sized for last year's business and capped against single-customer concentration limits set by default. Both are negotiable. A conversation with your bank, backed by good data, can double your working capital overnight.
Done well, this can pull 30–60 days out of your cash conversion cycle. For most businesses, that's the difference between funding payroll from operations and funding it from the owner's checking account.
The point
Your P&L can lie. Your cash position can't.
If the work is real and the customers are real, and the bank account still feels tight, the answer is almost never "sell more." The answer is to close the gap between delivered and deposited.
That gap is the cheapest credit line you'll ever extend. Stop giving it away.
If you're not sure how big your gap is, the Cash & Profit Diagnostic is designed to find it.