By Mike DeMaio, MBA, CEPA, Founder & Managing Director, Crown CFO
Short answer: yes. Cash flow is one of the most common reasons owners call us, and it’s one of the places an experienced CFO can make the biggest difference the fastest.
The frustrating part is that cash trouble often shows up in businesses that are doing well. Sales are up, the work is getting done, the P&L looks fine, and yet the bank balance is tight. If that sounds familiar, you’re in good company.
Why Profitable Businesses Still Run Short on Cash
Profit and cash aren’t the same thing. A few of the usual culprits:
- Growth eats cash. Taking on more work means paying for labor, materials, and equipment before customers pay you.
- Slow-paying customers. Net 45 or net 60 terms can leave a lot of your money sitting in receivables.
- Cash tied up in inventory or retainage. Common in manufacturing, distribution, and construction, where money is locked up long before it comes back.
- Debt payments and owner draws that were sized for an easier year.
- Seasonality that nobody planned around.
6 Ways a Fractional CFO Helps
1. Seeing It Coming
The biggest shift is moving from looking back to looking ahead. A fractional CFO builds a rolling cash flow forecast, often a 13-week view, so a shortfall shows up weeks or months before it hits. Seeing a squeeze coming gives you options. Finding out the day payroll is due doesn’t.
2. Finding the Real Cause
“We’re short on cash” is a symptom. The cause might be slow collections, a margin problem on certain jobs, too much inventory, or a pricing issue nobody caught. A CFO digs into the numbers to find what’s actually draining cash, so you fix the right thing instead of the loudest thing.
3. Getting Cash In Faster
Often the quickest wins are on the collection side: tightening up billing, following up on past-due invoices sooner, adjusting payment terms, or asking for deposits and milestone payments where it makes sense.
4. Managing Cash Going Out
A CFO helps you decide what to pay and when, negotiate vendor terms, and spot spending that can wait, so you protect payroll and key suppliers without damaging relationships.
5. Lining Up Financing Before You Need It
Asking a bank for a line of credit when things are already tight is a tough conversation. A CFO helps you get ahead of it, with a forecast and a clear story, so you’re talking to your lender from a position of strength. And if you’re close to a covenant, you’ll know it early.
6. Building the Habit
The goal isn’t just to fix one tight month. It’s to put a simple routine in place, a regular cash review and a few key numbers to watch, like how long customers take to pay, so the business stays ahead of cash instead of chasing it.
What a Fractional CFO Can’t Do
It’s worth being straight about this. A CFO can’t create cash out of thin air. If the underlying business model isn’t working, say margins are too thin to ever cover costs, a good CFO will tell you that plainly. The upside is that you find out early, while there’s still time to do something about it.
Signs It’s Time to Get Help
- You’re leaning on your line of credit to cover regular expenses
- You’re delaying vendor payments to make payroll
- You’re regularly surprised by your bank balance
- You can’t say with confidence where cash will be in 90 days
- A growth opportunity is on the table and you’re not sure you can fund it
If Cash Is Keeping You Up at Night
You don’t have to wait for it to become a crisis. At Crown CFO we bill by the hour, so you can start with focused time on cash visibility and build from there. If you’d like to talk through what’s going on, we’re happy to listen.