The cash collection cycle nobody owned
Invoices went out on the first. Money landed somewhere between day forty and day ninety. Nobody could explain the difference because nobody was watching it.
A founder I worked with thought his company's days sales outstanding was forty-five. The actual number, when we calculated it, was seventy-eight. He was running a SaaS business that was technically profitable on a booking basis and structurally cash-stressed on an operating basis, and he could not have told you the difference from memory until the moment we ran the math.
The thirty-three-day gap was the company's runway problem in disguise. It was also nobody's job.
Cash collection sits in the worst possible organizational seam. Sales believes its job ends at the signed contract. Finance believes the customer will pay on the contract terms. Customer success has a relationship and does not want to make it transactional. The dunning email — the polite, escalating sequence of your invoice is past due messages — is technically owned by accounting, which is usually one person handling thirty other things.
The result is that collections happens by default. Customers who pay on time pay on time. Customers who do not are politely reminded, eventually, by someone who finds it awkward. The middle of the curve — customers who would pay if asked but will not pay if not — is a long, slow, expensive bleed that shows up nowhere as a line item and everywhere as a cash-flow surprise.
The fix is unglamorous and almost embarrassingly cheap. One named person, with a weekly recurring calendar block, opens the AR aging report, identifies every invoice past thirty days, and sends a templated email. Past sixty, a phone call. Past ninety, escalation to the deal owner with a clear next step. The work is thirty minutes a week. The recovered cash, in most companies, is between three and seven percent of annual revenue.
The reason it does not happen is that the work feels small. Each invoice is not large enough to feel urgent. Each dunning email is not pleasant enough to feel rewarding. The work is constant, granular, and grading is invisible until it has been done for a quarter and the DSO line on the dashboard moves down by twenty days. That delayed feedback is what kills the discipline.
The cost of a missing collections function is paid in bridge rounds. Bridge rounds are paid in dilution. Dilution is paid in equity that should have been the founder's. The thirty-minute weekly task that nobody owns is the cheapest equity preservation exercise available, and it is missing in roughly half of the companies I have seen under a hundred people.
Booked is not cash. Cash is what survives the quarter. The difference is a person with a list, a calendar, and the patience to write the same polite email every Friday.