A finance expert tells B2B SaaS CEOs to update cash forecasts weekly or daily before cutting costs. Watch for declining cash-collection rates as an early warning sign. SaaS businesses feel cash-flow problems within weeks.
Chapters
JP, what's your view on that from a finance perspective when it comes to cost cutting and what CEOs need to be thinking about in times like this?
Well, the thing is that the first move before moving to cost cutting is to be sure that your view on cash forecast is accurate. And don't hesitate to even make your cash forecasts almost in a weekly period, even probably in a daily period, because SaaS, in fact, the impact, the immediate impact, you can start to feel this very thinny, how can I say, hints that can bring some big damages after 2 or 3 or 4 weeks even, right? If you start to show that you're, for example, the rate of cash collecting is decreasing or things like that, this is probably the beginning of a small issue.