The Week 8 Problem: How a Profitable Company Nearly Missed Payroll
A growing tech services company with $4.8M revenue and healthy profits found themselves 10 days away from missing payroll. Here's what went wrong and how they fixed it.
The Crisis
Nexus Technologies had been growing 35% year-over-year. Their P&L looked great. They were winning bigger contracts. Everything seemed fine.
Then in just 8 weeks, their operating account dropped from $420,000 to $85,000.
- Payroll (10 days)$82,000
- Vendor payments (3 weeks)$178,000
- Delayed client payment-$95,000
The Growth Paradox
On paper, Nexus was doing everything right:
But here's the problem: revenue on paper doesn't pay bills. They were winning work faster than they were collecting cash.
How 8 Weeks Changed Everything
The Root Cause
Nexus wasn't tracking cash flow — they were tracking revenue. Their accounting system showed a healthy P&L, but nobody was watching the bank account.
What They Tracked
Revenue, profit margins, contract pipeline
What They Should Have Tracked
Cash position, 13-week rolling forecast, days sales outstanding
The Four Lessons
Revenue ≠ Cash
A signed contract isn't money in the bank. Payment terms, collection delays, and billing cycles all create gaps between earning and receiving.
Growth Consumes Cash
Every new hire, every new project, every expansion requires cash upfront. The faster you grow, the more working capital you need.
Visibility Prevents Crisis
Nexus had the data. They just weren't looking at it the right way. A 13-week rolling forecast would have flagged the problem in Week 3.
Profitable ≠ Solvent
You can be profitable on paper and still run out of cash. Accrual accounting and cash accounting tell different stories.
What Nexus Built
After the crisis, Nexus implemented a cash forecasting system:
Need Cash Flow Visibility?
We build practical financial tools for growing businesses — cash forecasting, AR management, and financial dashboards that show what matters.
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