Cash Flow Management Playbook

CASH MANAGEMENT PHILOSOPHY

Understanding Cash as Oxygen

CASH MANAGEMENT FUNDAMENTALS

WHY CASH MANAGEMENT MATTERS:
☐ Cash is oxygen - run out and you die
☐ Revenue ≠ cash (timing differences)
☐ Growth consumes cash before generating it
☐ Surprises happen - you need buffers
☐ Options require runway

CEO'S ROLE IN CASH MANAGEMENT:
☐ Know the cash balance (daily during stress)
☐ Understand the burn rate and drivers
☐ Ensure 18+ months runway
☐ Make cash vs. growth tradeoffs
☐ Lead cash crisis response if needed

STARTUP CASH REALITIES:
1. You will spend more than planned
2. Revenue will come slower than hoped
3. Fundraising takes longer than expected
4. Something unexpected will happen
5. More runway = more options

CASH VS. REVENUE:
Revenue is recognized, cash is received.
A profitable company can go bankrupt
if cash flow timing is wrong.

THE CASH MINDSET SHIFT:
"Cash isn't about being cheap. It's about
having the runway to build something great.
Every month of runway is another chance
to figure things out."

CASH RULES FOR STARTUPS:
☐ Always maintain 18+ months runway
☐ Start raising 6 months before you need it
☐ Watch cash weekly, not monthly
☐ Understand the timing of collections/payments
☐ Have a cash crisis playbook ready

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COMPREHENSIVE CASH MANAGEMENT

Cash Flow Management Framework

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CASH FLOW MANAGEMENT PLAYBOOK
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COMPANY: _______________
As of: _______________
Finance Owner: _______________

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SECTION 1: CASH MONITORING
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DAILY CASH POSITION:
(Use when runway < 12 months or in crisis)

| Day | Opening | Deposits | Payments | Closing |
|-----|---------|----------|----------|---------|
| Mon | $_____ | $_____ | $_____ | $_____ |
| Tue | $_____ | $_____ | $_____ | $_____ |
| Wed | $_____ | $_____ | $_____ | $_____ |
| Thu | $_____ | $_____ | $_____ | $_____ |
| Fri | $_____ | $_____ | $_____ | $_____ |

WEEKLY CASH TRACKER:

Week of: _______________

OPENING BALANCE:         $_____________

CASH INFLOWS:
+ Customer collections:  $_____________
+ Other receivables:     $_____________
+ Investment/debt:       $_____________
TOTAL INFLOWS:           $_____________

CASH OUTFLOWS:
- Payroll:               $_____________
- Payroll taxes:         $_____________
- Vendor payments:       $_____________
- Rent/lease:            $_____________
- Software/tools:        $_____________
- Marketing:             $_____________
- Other:                 $_____________
TOTAL OUTFLOWS:          $_____________

CLOSING BALANCE:         $_____________

Net Change:              $_____________

RUNWAY CALCULATION:
Cash Balance: $_______
÷ Average Monthly Burn: $_______
= Runway: ___ months

Status: ☐ Green (18+) ☐ Yellow (12-18)
        ☐ Orange (6-12) ☐ Red (<6)

═══════════════════════════════════════
SECTION 2: CASH FORECASTING
═══════════════════════════════════════

13-WEEK CASH FORECAST:

| Week | Beginning | Inflows | Outflows | Ending |
|------|-----------|---------|----------|--------|
| W1 | $_____ | $_____ | $_____ | $_____ |
| W2 | $_____ | $_____ | $_____ | $_____ |
| W3 | $_____ | $_____ | $_____ | $_____ |
| W4 | $_____ | $_____ | $_____ | $_____ |
| W5 | $_____ | $_____ | $_____ | $_____ |
| W6 | $_____ | $_____ | $_____ | $_____ |
| W7 | $_____ | $_____ | $_____ | $_____ |
| W8 | $_____ | $_____ | $_____ | $_____ |
| W9 | $_____ | $_____ | $_____ | $_____ |
| W10 | $_____ | $_____ | $_____ | $_____ |
| W11 | $_____ | $_____ | $_____ | $_____ |
| W12 | $_____ | $_____ | $_____ | $_____ |
| W13 | $_____ | $_____ | $_____ | $_____ |

FORECAST ASSUMPTIONS:
☐ Collections: ___% within ___ days
☐ Payroll: Every ___ (dates: ___)
☐ Major payments: _______________
☐ Known inflows: _______________

SCENARIO ANALYSIS:
| Scenario | Month 3 Cash | Month 6 Cash | Runway |
|----------|--------------|--------------|--------|
| Base | $_____ | $_____ | ___ mo |
| Upside (+20% collections) | $_____ | $_____ | ___ mo |
| Downside (-20% collections) | $_____ | $_____ | ___ mo |
| No new sales | $_____ | $_____ | ___ mo |

═══════════════════════════════════════
SECTION 3: CASH OPTIMIZATION
═══════════════════════════════════════

ACCELERATE COLLECTIONS:

Invoice Timing:
☐ Invoice same day as delivery/start
☐ Send invoice via email (not mail)
☐ Include all payment details
☐ Offer multiple payment methods
Current DSO: ___ days | Target: ___ days

Payment Terms:
☐ Default to Net 15 (not Net 30)
☐ Require annual prepay for discount
☐ Collect credit card on file
☐ Enable auto-billing/auto-pay
Current prepay %: ___% | Target: ___%

Collection Process:
☐ Automated reminder at 7 days before due
☐ Automated reminder on due date
☐ Phone call at 7 days past due
☐ Escalation at 30 days past due
☐ Final notice at 45 days past due
☐ Collections/write-off at 90 days

AR AGING ANALYSIS:
| Aging Bucket | Amount | % of AR | Count |
|--------------|--------|---------|-------|
| Current | $_____ | ___% | ___ |
| 1-30 days | $_____ | ___% | ___ |
| 31-60 days | $_____ | ___% | ___ |
| 61-90 days | $_____ | ___% | ___ |
| 90+ days | $_____ | ___% | ___ |
| **Total AR** | $_____ | 100% | ___ |

MANAGE PAYABLES:

Payment Terms Negotiation:
☐ Request Net 45 or Net 60 from vendors
☐ Negotiate payment plan for large invoices
☐ Ask for vendor credits/discounts
Current DPO: ___ days | Target: ___ days

Payment Timing:
☐ Pay on due date (not before)
☐ Batch payments weekly (not daily)
☐ Prioritize critical vendors
☐ Hold non-critical if needed

AP PRIORITY FRAMEWORK:
| Priority | Category | Treatment |
|----------|----------|-----------|
| 1 | Payroll | Never delay |
| 2 | Taxes | Never delay |
| 3 | Rent/critical infra | Pay on time |
| 4 | Key vendors | Pay on time |
| 5 | Non-critical vendors | Manage timing |
| 6 | Nice-to-have | Defer/cut |

REDUCE BURN:

Quick Wins (Implement < 7 days):
☐ Audit and cancel unused subscriptions
☐ Pause discretionary spending
☐ Freeze travel/events
☐ Review credit card charges

Medium-Term (Implement < 30 days):
☐ Renegotiate vendor contracts
☐ Downgrade software tiers
☐ Reduce marketing spend
☐ Hiring freeze

Structural (Implement 30-90 days):
☐ Headcount reduction
☐ Office space reduction
☐ Compensation adjustments
☐ Outsource functions

Cash Crisis Response Playbook

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CASH CRISIS RESPONSE
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RUNWAY STATUS AND ACTIONS:

GREEN (18+ months):
☐ Monitor cash weekly
☐ Optimize collections/payables
☐ Standard financial management
CEO involvement: Monthly review

YELLOW (12-18 months):
☐ Monitor cash weekly
☐ Begin fundraise planning
☐ Model scenarios
☐ Identify cost reduction options
CEO involvement: Weekly review

ORANGE (6-12 months):
☐ Monitor cash daily
☐ Active fundraising
☐ Implement cost reductions
☐ Accelerate collections
☐ Extend payables
CEO involvement: Daily awareness

RED (<6 months):
☐ Monitor cash daily
☐ Emergency cost cuts
☐ CEO personally on collections
☐ Emergency fundraise/bridge
☐ Consider all options
CEO involvement: Constant

CASH CRISIS CHECKLIST (Red Zone):
☐ Assess true cash position
☐ Model runway under scenarios
☐ List all possible levers
☐ Communicate with board
☐ Make immediate cuts
☐ Personal CEO attention on AR
☐ Negotiate with landlord/vendors
☐ Explore all financing options
☐ Consider strategic options

Cash Dashboard

Metric	Current	Last Month	Target	Status
Cash balance	$	$	$	☐
Monthly burn	$	$	$	☐
Runway (months)			18+	☐
DSO (days)			<45	☐
DPO (days)			>30	☐
Collections rate	%	%	95%+	☐

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