Cash Flow Run

How to play Cash Flow Run

You run the finances of a small B2B company for one year. The business starts with $40k in the bank, sells about $100k a month and carries $46k of fixed costs. Half of every sale is paid on delivery. The other half arrives a month later.

Each month brings one decision: a customer who wants longer terms, a tax bill, a broken machine, a bank offering a loan. Read the statement next to the decision first. It shows what will come in and go out this month before you choose anything. Then pick an option and the month settles.

The only rule is the one every real company lives under. If the bank balance goes below zero, the run is over, no matter how profitable the business looks on paper.

How the score works

If you reach December, the score is your closing cash minus bank debt, plus a small bonus if you looked after the team at year-end. The ranks are Survivor, Controller, Treasurer and CFO material. A run that ends early is scored by how many months you lasted.

Why profitable companies run out of cash

Profit and cash are different things. Profit is recorded when you send the invoice. Cash arrives when the customer pays, which can be 30, 60 or 90 days later. In between, payroll, rent and suppliers still have to be paid. A company can grow its sales every month and still fail because the money is sitting in receivables.

The game is built around the three levers a finance team actually has:

• Receivables. How fast customers pay you. Discounts for early payment and invoice factoring bring cash forward at a cost.
• Payables. How fast you pay suppliers and the tax office. Stretching them helps this month and hurts a later one.
• Financing. A credit line is cheap insurance when you take it before you need it, and expensive or unavailable once you are already short.

Five habits that keep the balance above zero

• Forecast cash by week or month, not only profit by quarter. A simple list of expected receipts and payments is enough to start.
• Keep a buffer. Many finance leads aim for at least one to two months of fixed costs in the bank.
• Price payment terms. A large order on 60-day terms costs you materials today, so treat long terms as a loan you are giving the customer.
• Arrange credit early. Banks lend most easily to companies that do not urgently need the money.
• Be careful with fixed costs. A hire or a lease is paid every month, including the slow ones.

For the financing side in more detail, read the business line of credit guide and the comparison of small business loans. If you want to run your own numbers, the free finance tools include calculators you can use without signing up.