The Situation
The CEO emailed three direct questions: how do we weather this storm, how do we keep it from happening again, and which areas do we cut first. The P&L said the business was earning money. The bank account said the opposite. Cash had dropped from $42K to $3,600 in a single month while gross margin rose 16 points.
There was no rolling cash forecast, no view of where cash was actually going, and no protocol for what triggered a spending pull-back. Decisions were being made on instinct — and on a delay.
What CEI did
Built a 13-week rolling cash flow forecast tied to actual collections, payroll cadence, and vendor batching. Replaced gut-feel cash management with an updated forecast every Monday morning.
Diagnosed the structural drain: a $131K spike in “Other Current Assets” — uncapitalized prepaids, vendor deposits, and unallocated inventory — that had been growing for months and was invisible on the P&L.
Aged every prepaid balance over $5K, reclassified six-figure misposted items, and forced documentation discipline going forward.
Installed weekly variance flags so the leadership team would see cash divergence inside a week rather than after a month-end close.
$131K
Hidden Cash Trap Surfaced
13-Week
Rolling Forecast Live
Weekly
Variance Flags Active
Within the first cycle the team had a working cash model on the wall and a reclassified balance sheet that finally tied to operational reality. The CEO went from chasing answers to running the business off a forecast that updated every Monday.
In Their Words
“We thought we had a sales problem. CEI showed us in one meeting we had a balance sheet problem we had been ignoring for nine months. That changed the entire conversation.”
— President & CEO | Confidential Client