The problem is rarely where you're looking

The wake-up call before I started

It was not the sort of call I wanted to receive. A week before I was due to start, the MD phoned to tell me that the company was behind on its payments to suppliers.

I could have backed out, but I'd made a commitment and was up for a challenge. I needed to start with the nitty-gritty, hands-on work, getting into the operational detail, and building a short-term cash flow forecast to work out where the pinch points were and whether the business could get through the next few weeks. It could, narrowly. We could pay the wages and keep the doors open. That bought me time to find out what was going wrong.

Following the evidence

I started with invoicing and debt collection, but the aged debt position was healthier than I expected. Next I went to the projects, to map out what each one was due to bill and when, what it cost to deliver, what work was left to do and what the future cash flows looked like. The margins looked good. Utilisation was strong. So where was the cash going?

I discovered that there wasn't much in place to answer that question. The management accounts weren't dependable. An annual budget had not been agreed. The control accounts hadn't been reconciled properly, which is the financial equivalent of not checking your bank statement against your own records. And there was no clear view of how operational decisions were affecting cash flow across the month and the quarter.

There was nothing else I could do other than rebuild the records, top down and bottom up, to see the big picture but capture the detail at the same time. Once I understood the numbers, it was clear the problem wasn't simply timing or ordinary working capital pressure. The reporting structure had allowed financial problems to stay hidden far longer than they should have.

The problem

The owners had built a good business. The work was top quality, the customers were returning with new projects and the pipeline was decent. But they had spent the best part of a year struggling with cash flow and no way of knowing why.

Within months, we started to build cash reserves. For the first time, the owners could see their company clearly in the numbers, and trust what they were seeing.

That business wasn't unique.

A lot of the time, the symptoms show up in one place but the cause sits somewhere else.

Why this happens so often

I've seen:

• cash flow problems caused by delivery terms rather than finance

• sales problems caused by operational bottlenecks

• marketing spend that nobody could properly connect to revenue

• important projects that everyone discussed but nobody really owned

None of those were caused by people being bad at their jobs. Usually it's the opposite. Teams become highly competent within their own function, but nobody has enough visibility across the end-to-end processes to understand where things break down.

That's particularly true in owner-managed businesses. The founder is often the only person close enough to every part of the company to connect the dots, but they're also the person with the least time to stand back and assess it objectively.

What lets me spot it

I haven't only sat in finance crunching the numbers. I've run operations teams and worked inside commercial teams pricing and winning work. This means when I look at a business, I'm not only reading the accounts. I know how the work gets sold, how it gets delivered and what the numbers ought to say if those things are working efficiently. When they don't, something is usually wrong.

Turning instinct into a process

For years I picked this up instinctively, spotting where one part of the business didn't line up with another. But instinct isn't a repeatable system. It depends on the right person being in the room at the right moment. So I formalised it into a structured review across six connected areas, looked at together rather than one at a time: the money, how the work gets done, how it's sold and priced, how it's governed, the risks it carries, and where it's heading.

As a framework, those six areas are the Financials, Commercial, Governance, Operations, Risk and Control, and Strategy and Leadership. Most businesses are stronger than they think in some areas and more fragile than they realise in others.

Why I look across the whole business

That's why I stopped looking at finance problems as purely finance problems.

I see the patterns others miss and fix what's getting in the way. The Business Mapping Review is how I make sure I'm covering the whole of a business, including the parts everyone stopped looking at.

I built it for owner-managed businesses and purpose-led organisations. That's who I work with now, as a fractional Finance Director across Buckinghamshire and the Thames Valley, and it's where the work means the most to me. With an owner, it matters in a way it doesn't in a big corporate, and getting it right is something you can feel.

Assess your own business

If you'd like to understand where the strengths and vulnerabilities are in your own business, please request the Business Mapping Review Self-Assessment.

It's a short diagnostic based on the same questions I'd ask if I was working with you. The aim is simple to identify where the gaps are, where the risks may be hiding, and where seemingly unrelated problems may be connected.

Request the Self-Assessment through the Contact Me page and I'll send it over.

If you already know the problem is just the finances, ask for the Financial Management Review, which focuses on the finance dimension.