CASE STUDY 04
Revenue Was Growing.
He Couldn't Pay His Bills.
Top-line growth is supposed to solve problems, not create them. This CEO discovered that what you're owed and what you have are two very different things
The Situation
He walked into the coaching session looking uncharacteristically tense. This was a CEO who was usually upbeat — optimistic by nature, enthusiastic about his business. Not today.
Revenue was growing. He knew that. What he couldn't explain was why he was increasingly struggling to pay his bills. The numbers said business was good. His bank account told a different story.
The Coaching Intervention
The coach shifted their attention from the income statement — which was showing growth — to the balance sheet, and specifically to one line: accounts receivable.
The question was simple: "How much do your customers owe you right now?"
The answer was startling. The receivables balance was enormous relative to monthly revenue — and it was climbing every month. Further analysis revealed that over 30% of the company's annual revenue was sitting uncollected. Invoices that should have been paid in 30 to 40 days were aging to 90, even 120 days.
The CEO had never hired a receivables manager. He'd never felt the need. The dollars had always come in. He hadn't noticed that the incoming tide was increasingly delayed — and that the delay was being masked by the growth in new billings.
“The dollars just always kept rolling in.
I never felt the need for an A/R manager.”
The fix was immediate and unglamorous: start collecting. The coaching session shifted to building a simple receivables process — who would call which accounts, in what sequence, using what language. Within a few months, cash flow was restored.
The same coaching relationship surfaced a second, almost comic balance sheet problem: the CEO discovered he had been systematically overpaying a European vendor for years. The vendor, unable to get the overpayments returned, had eventually instructed his own accounts receivable team to use the surplus to buy lottery tickets — for my client. The CEO had won a significant sum in a foreign lottery he'd never entered. It was a windfall. It was also a sign that no one had been reading the accounts payable side of the balance sheet either.
The Outcome
The cash flow problem was resolved within a few months of implementing a proper receivables process. The business did not require new revenue, new customers, or outside capital to fix the problem — it just required attention to the money that was already owed.
The lottery windfall aside, the accounts payable audit also recovered real money and established vendor relationships on far more accurate footing.
The PACER Principle
The PACER Action Model's Control stage asks two essential questions: Are our actions producing our intended outcomes? And — importantly — do we have the visibility to know? For owner-operators, financial control is too often equated with watching the P&L. The balance sheet is where the real operational health of a business lives: what you're owed, what you owe, and how much runway you have.
Revenue growth without receivables management isn't growth — it's deferred collection dressed up as progress. The business that controls its balance sheet alongside its income statement is the business that survives its own success.