Profit Is Opinion. Cash Is Reality. - How I Helped a Fast-Growing Scale-Up Prevent a Liquidity Crisis

High growth can be deceiving. A scale-up that grows from zero to €15 million in revenue in just three years looks like a success story from the outside. But growth often hides structural weaknesses — especially when finance, operations and forecasting aren’t scaling alongside commercial momentum.

When I joined this company as a strategic finance advisor, the numbers told a very different story than the narrative. And within weeks, it became clear that the biggest risk was not profit — it was cash.

The Profit Illusion: A €3.5M Result That Was Actually €2M

Management believed the business was generating €3.5 million in profit.After reviewing the accounting structure, accruals, and inventory valuation, I uncovered several inaccuracies. Once corrected, the true profitability was closer to €2 million.

But while misstated profit is a strategic problem, it wasn’t the existential one.

The real issue was that no one knew the company’s cash position with any precision. And cash — not profit — determines survival.

Cash Tells the Truth: No Forecast, No Visibility, and a Crisis Approaching

When I built the first 13-week cash flow forecast, the picture changed instantly:

An acute liquidity shortfall was coming within weeks.

Digging deeper, the cash issues traced back to the usual scale-up challenges:

• Excess inventory caused by weak demand planning

• High receivables due to a lack of credit control processes and responsibilities

• No structured link between sales growth, operations, and cash impact

• No rolling forecast to anticipate runway or financing needs

On paper, the company was profitable.In reality, it was close to running out of cash.

Immediate Stabilisation: Forecasts, Funding and Control

To regain control, we first had to restore visibility and buy time:

1. Restoring visibility

• Built a weekly 13-week cash forecast

• Developed a 12-month rolling forecast connecting sales, operations, and cash impact

2. Securing financial stability

• Arranged temporary shareholder funding to bridge the near-term gap

• Later secured working capital financing from a bank, made possible by improved forecasting and reporting structures

3. Strengthening working capital

• Implemented a full AR policy, including credit limits and structured follow-up

• Introduced credit control software and dashboards

• Built and trained an AR team to reduce DSO

• Improved sales forecasting and demand planning

• Updated purchasing and replenishment procedures to avoid overstocking

Together, these measures created immediate breathing room — and a long-term foundation for disciplined, predictable cash flow management.

From Growth Chaos to Financial Scalability

Within months, the transformation was visible across the business:

Before• Profit overstated• No cash insight• Looming liquidity shortage• Inventory and receivables out of control• No structured forecasting

After• Accurate, reliable financial reporting• Weekly cash visibility and scenario modelling• Stabilised runway with shareholder + bank financing• Reduced working capital pressure• Better forecasting, better purchasing, better decisions

Profit says how you performed. Cash determines whether you survive.

Why This Matters for Scale-Ups

Fast-growing companies often underestimate the importance of cash discipline.They rely on top-line momentum and believe profit equals health. But in practice:

Many scale-ups don’t run out of profit. They run out of cash.

A strong finance foundation — forecasting, working capital control, operational alignment — is what allows growth to continue without risking crisis.

If your scale-up is growing fast but lacks visibility on cash, runway or working capital, it may be time to take a closer look.

👉 Want to strengthen your cash visibility and build a finance foundation for scalable growth?Let’s connect.