Cash, margin and the 2027 plan

In many mid-market businesses the management pack for a month reaches directors well into the following month. By then the decisions it should have informed have been taken. Stock for the next season has been ordered, prices have been set, a hire has been approved and a marketing budget committed, each on figures that were already a month old when they were used.

The delay usually has good reasons. A close of statutory quality waits for supplier invoices, bank reconciliations, accruals and stock adjustments, and it should. The difficulty comes from asking one document to do two jobs. A close produces figures that will not change. Management needs figures that are early, close enough to be acted on, and explicit about what they do not yet include.

That calls for a second report alongside the pack. A weekly cash and margin flash, built from the order system, the bank feed and the payables ledger, can be ready on the first working day of each week. It shows cash received and committed, gross margin after returns and discounts by channel, and stock on hand against open orders. At month end the flash is reconciled to the ledger, and each difference is listed with its cause. After a few cycles the differences become predictable, and directors learn how far the early figure can be trusted for each kind of decision.

The 2027 plan should be built on that pairing. A plan made from last year's management accounts plus a percentage repeats last year's timing errors and cannot be checked until each quarter has closed. A plan made from the drivers the flash already measures, such as orders, return rates, payment terms and stock turns, can be compared with what actually happens every week from January.