Most businesses don’t die because of competition. They die because of cash mismanagement.
And I do not say this lightly (my opening statements are never light haha)
The founders are hustling, revenue is climbing but the bank balance never seems to match the story.
Why does this happen? Isn’t more sales equal to more prosperity?
Not always.
Here’s where your books come into play… and why you must have a strong finance controller/ team!
1. Tracking growth spend v/s survival spend
What doesn’t get tracked doesn’t get improved.
Founders (and junior accountants) love to lump everything under “expenses”.
But not all expenses are equal. Paying salaries, rent, compliance fees, utilities – those keep the lights on. Marketing blitzes, new hires, R&D – those are growth bets.
If you don’t split these in your MIS, you’ll never know your true runway.
Tomorrow if sales dip, you should know exactly how long the company can survive just by cutting growth spend.
Most startups don’t, and that’s why cash flow shocks feel fatal.
Action:
In your Tally/Zoho/QB setup, create two cost buckets: Survival and Growth. Review them separately every month.
2. Stop tracking profit, start tracking cash conversion
A P&L can flatter you.
You booked sales worth ₹1 crore last quarter? Great. But if 60% of that is stuck in receivables, you’re not rich.
Your business lives or dies by cash conversion.
How quickly does a rupee invested in operations come back as a rupee in your bank account?
That’s the only number that matters for survival.
Action:
Track Debtor Days and Creditor Days. If your customers are paying you in 90 days but you’re paying suppliers in 30, you’ve set yourself up for a cash crunch. Negotiate both ends aggressively.
I cannot shout this loud enough - CASH FLOW IS KING.
3. Build a one-page rolling cash forecast
Don’t overcomplicate it. Forget giant Excel models with macros. You need a simple, one-page rolling forecast:
Opening cash
Expected inflows (collections, new sales, funding)
Expected outflows (payroll, rent, suppliers, EMI, GST/TDS)
Update this every Saturday. It takes 20 minutes if your books are clean. That one page will give you more clarity than any expensive dashboard that is sold to you.
Action:
Make it a ritual. Saturday morning (right before my newsletter drops hehe), ensure your CA/ finance lead mails you the updated cash forecast. No excuses!
Why this matters right now
We are not in 2021 anymore.
2025 is not a cheap money era. Investors are stingier, banks want collateral, and customers are stretching payment cycles.
You can’t buy your way out of bad finance hygiene anymore. The founders who survive are the ones who treat finance discipline as seriously as product discipline.
Quick test for you
Answer honestly:
Do you know your exact cash runway if sales dropped 30% tomorrow?
Do you know which clients are effectively “borrowing” your money?
Do you have a forecast that matches your bank balance, not just your P&L?
If the answer is no, you’ve got homework.
Bottom line
Cash is king.
Cash is king.
Cash is king.
Just putting it out there at the cost of repetition.
Finance is not just compliance or accounting. For a founder, it’s survival strategy.
Put these habits in place, and you’ll stop bleeding cash before it kills you.
As always…
To all those with a mission in life,
VijayBhava!
P.S. If you found this newsletter helpful, do share it across with your entrepreneur friends who will find this useful!
Thank you, and have a lovely weekend.