In distress situations, the income statement tells only part of the story. A short-term cash flow, frequently updated and assigned to clear owners, is essential.
Cash visibility protects continuity and supports credible discussions with banks, suppliers, investors and other stakeholders.
The industrial plan follows stabilisation and must identify operational levers, funding needs and the governance required for execution.
Making a cash forecast actionable
- Separate available cash, drawable facilities and expected collections.
- Update a rolling short-term forecast every week.
- Assign an owner to major collection and payment assumptions.
- Compare forecast and actual cash movements to correct variances promptly.
Practical example
A collection expected at month-end cannot fund a critical payment in the middle of the month. The forecast should expose that timing gap before it becomes an operational issue.
Illustrative example. The appropriate approach depends on the circumstances of each company.