As a very long suffering Man Utd fan I was interested to see if this week’s transfer deadline brought some much needed positivity to a pretty awful season (run of seasons!). I didn’t expect any new incoming signings nor did it happen. But should it have? Would a last minute jerk reaction to (another) defeat the previous day have made any long term difference.
Cash Always Gets Your Attention—But Is It Too Late?
As business owners, does your cash position tend to get attention at the worst possible moments or in reaction to negative news – if this is the case then it’s already a problem. For example, it’s easy to assume things are fine until you seem to be running short on payroll, your HMRC payment feels higher than you believed, or a customer payment not arriving throws off your spending plans. The problem? By the time you’re feeling the strain, the damage is already done.
Cash isn’t just a financial metric—it’s your stress barometer. The more last-minute cash issues you face, the more unnecessary pressure you’re carrying.
Operating in Reactive Mode
Like Man Utd’s transfer policy in recent years, if you fall into a reactive planning mode with regard to cash, decisions will be driven by short-term panic rather than long-term strategy based on strategically planning the development of your business (Man Utd’s team), determining the appropriate fix (the right player available for the method of play you want) and negotiating with time on your side (rather than spending a last minute premium as you are at deadline).
Reactive mode solves one problem and creates another simultaneously.
E.g. “We Need to Make Payroll Next Week” Mode means scrambling to cover wages because no one planned ahead, leading to delaying supplier payments or dipping into tax savings money to make ends meet.
High stress, low confidence—leading to rushed decision-making.
E.g. “Let’s Chase That Overdue Invoice” Mode, when you suddenly realise a big invoice is late when you actually need the money. Now, leads to visible desperation rather than solving as part of a structured process. Customers sense that urgency which potentially weakens your negotiating power or leads to loss of custom for fear of your stability..
E.g. “Where Did That Tax Bill Come From?” Mode. Not planning for VAT, corporation tax, or Paye payments until the deadline looms meaning having to dip into working capital or take out short-term finance, or paying penalties and interest because cash wasn’t set aside in advance.
E.g. “Let’s Cut Costs Fast” Mode can lead to slashing marketing budget, recruitment plans, or dropping capital investment plans to plug a cash gap and possibly also making cuts that harm long-term growth instead of structuring sustainable cost control.
Reactive mode keeps you in survival mode, constantly putting out fires rather than steering your company towards stability and growth.
“You can’t change the direction of the wind, but you can adjust your sails.” – Jimmy Dean
Cash flow challenges will always exist, but staying in reactive mode means being at the mercy of every unexpected expense, late payment, or market fluctuation. Instead, adjusting your financial “sails” proactively ensures you’re always prepared, no matter what comes your way. In next week’s newsletter I will cover how to operate in stable, calm cash mode, forecasting with confidence and having contingency plans in place for almost all eventualities.
PS: One of our wins this year was to bring overdue receivables for a business down from almost 20% to under 2.5% by implementing a simple, joined up invoicing and credit control strategy.
PPS: Want a quick review of your cash position? Let’s talk and I can walk you through a practical approach to keeping cash in check (this is always on regular call agendas for our customers).
Main Image Credit: Photo by Amy Humphries
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