In a recent LinkedIn post, Tom Griffiths discusses a common yet often overlooked financial paradox: how businesses that appear profitable on paper can suddenly find themselves in dire cash flow trouble. Griffiths, who shared insights based on a recent client interaction, highlights the critical disconnect between reported profits and actual available cash.
Griffiths recounts a conversation with a client, an £18m revenue London-based construction business, whose owner expressed bewilderment at their cash flow problems despite a reported profit. “‘Have you seen businesses of our size have cash flow problems like this?’” the client reportedly asked Griffiths. This sentiment underscores a widespread issue where positive accounting figures mask underlying financial vulnerabilities.
The Silent Leakage of Cash
Griffiths argues that cash doesn’t vanish abruptly; instead, it ‘leaks’ away gradually and often unnoticed. He identifies several common culprits for this leakage:
- Late-paying clients
- Unexpected expenses
- Outdated financial forecasts
- A pervasive reliance on hope rather than strategy
According to Griffiths, the belief that everything will proceed as planned is a dangerous assumption. “Hope is not a cash flow strategy,” he emphasizes, pointing out that this mindset prevents proactive management.
Strategies for Robust Cash Flow Management
To combat these issues, Griffiths proposes a series of practical, actionable strategies designed to provide clarity and control over a business’s cash position. He stresses the importance of consistent monitoring and forward-looking planning.
Weekly Cash Tracking
Griffiths advocates for meticulous weekly tracking of all cash inflows and outflows. This regular review aims to eliminate surprises and provide an up-to-date understanding of the company’s liquidity.
Scenario-Based Forecasting
He recommends building multiple forecast versions—optimistic, realistic, and pessimistic. This approach allows businesses to understand their financial resilience under different potential scenarios. “Build 2-3 versions of your forecast. Optimistic. Realistic. Pessimistic. Know exactly how long you survive in each,” Griffiths advises.
The 13-Week Rolling Forecast
A key tool proposed by Griffiths is the 13-week rolling cash flow forecast. He describes this as a vital short-term ‘radar’ that anticipates upcoming cash needs on a week-by-week basis. This allows leaders to address potential shortfalls proactively, rather than reactively after a crisis has emerged.
Establishing Clear Cash Rules
Griffiths also outlines the necessity of setting and adhering to simple, yet firm, cash management rules. These include:
- Promptly chasing outstanding receivables.
- Prioritizing payments for essential operational costs.
- Actively negotiating better payment terms with suppliers and clients wherever possible.
By implementing these measures, Griffiths suggests that businesses can achieve a clearer financial outlook, extending up to 18 months ahead. This proactive stance, he argues, provides early warnings of potential issues and prevents the disorienting experience of discovering a cash crunch unexpectedly.
Ultimately, Griffiths’s post serves as a crucial reminder for business leaders that profitability alone is insufficient. Effective cash flow management, characterized by diligent tracking, realistic forecasting, and disciplined execution, is paramount for sustained business health and stability.
📝 About This Content
This article is based on insights shared by Tom Griffiths on LinkedIn.
📅 Originally posted on August 16, 2026 | View original post on LinkedIn →