Crunch: It can be an interesting texture to add to a dish. But when it comes to cash flow, avoiding a crunch is arguably one of the CFO’s biggest responsibilities. Sometimes even the most dogged finance chiefs end up in situations where the past-due bills are piling up, the company’s receivables are ballooning as customers delay payments, or both. Regardless of the reason, when liquidity dries up, it can send finance into a panic. “If you’re not watching cash and taking steps to ensure you have enough of it, you are putting your business on shaky ground,” Ram Charan, an advisor to boards and CEOs, wrote in his book, Leading Through Inflation. Have a process and plan. Preventing a cash flow crunch in the first place seems like an obvious idea, but Mark Zeffiro, managing partner at professional services firm Brooks International, told CFO Brew that without a link between a business’s financial and operating standards, pricing and predictability can quickly get out of control. Keep reading.—DL |