Ask most business owners how the company is doing and they point to two numbers: revenue and profit. If both are climbing, the story writes itself. The business is healthy. Then one day payroll gets tight, suppliers start calling more often, and the finance team starts delaying payments just to keep the lights on. The question that follows is always the same: if we are profitable, where did the cash go?
It is one of the most common questions in business, and one of the most misunderstood, because profit and cash are not the same thing. One measures performance. The other determines whether you survive next quarter.
That was the exact position of a fast-growing FMCG business doing almost everything right on paper. Sales were up. Customers were expanding. Profit was real. Cash flow kept getting worse anyway. Growth, instead of strengthening the business, was quietly straining it.
The first instinct was to chase collections harder: call overdue customers, push the sales team, tighten the follow-up. Necessary, but it only treated the symptom. Outstanding invoices rarely happen by accident. They are the sum of dozens of small decisions made earlier in the customer journey: who approved the credit, on what terms, whether sales incentives rewarded revenue without ever asking about collections.
What that review found was a business making credit decisions by instinct rather than by system. Limits were inconsistent. Reporting flagged accounts only after they were already overdue. Sales, finance and operations each saw their own slice of receivables, and nobody saw the whole picture.
So the fix was not faster collections. It was a credit framework that stopped the risk from being created in the first place: consistent approval criteria, credit limits tied to actual financial capacity instead of commercial optimism, and clear ownership between sales and finance so growth no longer came at the expense of control.
The real shift happened in the questions leadership started asking before extending credit, not after chasing it: how much exposure do we already carry, are we growing profitably or just growing receivables. That single change in sequence, asking before instead of chasing after, is what separated this business from the one it used to be.
Growth stopped consuming cash. It started generating it. Because revenue without cash discipline was never really growth. It was exposure with a good headline.