Cash Flow Problem Solver

 Cash Flow Problem Solver — Lessons from Bryan E. Milling

Cash flow isn’t just numbers on a spreadsheet — it’s the oxygen of business survival. Bryan E. Milling’s Cash Flow Problem Solver (a timeless classic from the 80s–90s) breaks down the most common liquidity traps and offers practical fixes. I’ve distilled each chapter into bite-sized insights, examples, and quotes you can apply today 📊 Chapter 1: Understanding Cash Flow - Quote: “Profit is opinion. Cash is fact.” - Summary: Explains why businesses fail not from lack of profit, but lack of liquidity. - Example: A retailer shows profit on paper but collapses when suppliers demand payment before customers pay. - Takeaway: Always track inflows/outflows, not just net income. 🧾 Chapter 2: Receivables Management - Quote: “A sale isn’t a sale until the cash is collected.” - Summary: Focuses on tightening credit terms and accelerating collections. - Example: Offering 2% discount for payment within 10 days vs. 30-day terms. - Takeaway: Incentivize early payments, monitor aging reports weekly. 📦 Chapter 3: Inventory Control - Quote: “Inventory is cash in disguise.” - Summary: Excess stock ties up liquidity; too little stock risks lost sales. - Example: A manufacturer reduces raw material stock by 20% using just-in-time purchasing. - Takeaway: Balance turnover speed with customer demand. 💳 Chapter 4: Payables Strategy - Quote: “Stretch payables without breaking trust.” - Summary: Negotiating supplier terms to align with receivables. - Example: Extending supplier terms from 30 to 45 days while maintaining goodwill. - Takeaway: Communication with suppliers is as important as negotiation. 📈 Chapter 5: Forecasting & Planning - Quote: “Cash flow problems are predictable — if you look ahead.” - Summary: Introduces rolling forecasts and scenario planning. - Example: A consulting firm models three scenarios: optimistic, base, and worst-case. - Takeaway: Forecast monthly, update quarterly, stress-test assumptions. 🛠️ Chapter 6: Problem-Solving Toolkit - Quote: “Every cash crisis has a solution — if you act early.” - Summary: Practical fixes: short-term loans, factoring, renegotiating contracts. - Example: A startup bridges a 3-month gap using invoice factoring. - Takeaway: Build a toolkit of emergency levers before you need them. 🌍 Chapter 7: Strategic Growth & Cash - Quote: “Growth consumes cash before it creates it.” - Summary: Warns against scaling too fast without liquidity buffers. - Example: A SaaS company expands globally but burns cash on upfront marketing. - Takeaway: Growth must be paced with cash reserves. 🔑 Final Insight Cash flow isn’t just accounting — it’s strategy, psychology, and survival.