Sales seem fine, but no cash. The report shows closed deals, the salespeople have met the sales plan, and the head of sales presents the revenue figures. The owner checks the accounts and cannot understand why they have to prop up a good month with their own money again.
The first explanation is that they have not sold enough. So the team’s sales plan is increased and they are asked to close deals faster. But first I would check something else: which deals the team considers good and what the business is left with after delivering on them.
The sales plan for revenue can be met through work that is unprofitable for the company to repeat.
A closed deal does not yet mean the business has received money
Take the deals the head of sales counted towards meeting the sales plan for the most recent completed period. For each one, set out not just the contract value, but four more facts alongside it:
- how much the client must pay and when;
- what discount they were given and how long they were allowed to defer payment;
- what the company committed to doing beyond its usual terms;
- what direct costs will be involved in delivering what was promised.
These entries will distinguish sales that look the same.
One deal has been paid for on clear terms and fits within the company’s usual work. The second shows the same revenue in the report, but the money will arrive later, the price has been reduced, and delivery will require additional people or purchases. For the salesperson, both deals are closed. For the owner, these are two different decisions about money and workload.
If the report shows only the contract value, it answers the question “what value of contracts was signed?” It does not answer “what did the company receive, and at what cost?”
Different constraints can lie behind “no money”
First, you need to distinguish at least three situations.
Clients have not paid yet. The sale has been made, but the team counts a contract or an issued invoice as revenue, rather than a payment made according to the agreed schedule. Then you need to check the payment terms, the salesperson’s promises and who handles the next step before the money comes in.
The money has arrived, but the deal brought in less than expected. The reason could be a discount, expensive delivery, a custom modification or another direct expense. The question here is not how quickly payment arrives, but what terms the salesperson is allowed to close a deal on.
The deal itself is fine, but the business spent money before receiving it from the client. Then the constraint may lie in cash reserves, purchases or the terms for fulfilling the deal. The head of sales does not decide the company’s financial policy, but must not promise terms whose consequences no one has calculated.
One complaint from the owner leads to three different actions: recover an overdue payment, change the terms of sale or recalculate whether the company can handle such an order. Increasing the sales plan is not one of them.
Why even more sales can make cash problems worse
If a salesperson gets credit only for the contract value, they repeat the behaviour that gives them a result in the report. A discount helps close a deal faster — the discount is repeated. A long payment deferral removes an objection — deferral becomes a habit. A promise outside the usual terms moves the client forward — production gets another exception.
This is not necessarily an attempt by the salesperson to harm the company. They are doing what the system has defined as a sale.
The head of sales may also honestly fulfil the task they were given. If the owner asked for revenue but did not set acceptable terms, the head of sales will manage the team towards that amount. So there is no point in starting by blaming the team. First, you need to see what decision the business itself rewards.
Selling more deals of the same kind means repeating their financial effects faster. If each new sale requires more money, people or time upfront, growth in signed contracts makes the shortage worse rather than relieving it.
The sales plan must distinguish between the amount and a result that benefits the business
The owner sets the financial limits: the allowable discount, payment terms, the minimum result from a deal and the limit on commitments outside the usual terms. The head of sales translates these limits into the team’s daily decisions.
This shows up not in a new column in a table, but at specific moments:
- a salesperson does not promise deferred payment before checking its terms;
- a deal involving an exception goes for approval before a promise is made to the client, not afterwards;
- the forecast shows the signed contract value and the expected payment separately;
- the head of sales reviews a deviation not after the month has closed, but when the deal’s terms change;
- the same unprofitable exception is not repeated with the next client as a new norm.
The team is not required to decide for itself what financial risk the company should accept. But it must put that choice to the owner in time and not hide it behind the total sales figure.
A check over one week
Do not change the incentives and the whole report at once. Choose five new deals the team intends to close soon.
For each one, the head of sales records five answers: the expected payment and its date, the discount, the payment deferral, direct additional commitments and the decision that requires the owner’s approval. If any fact is missing, the deal stays in the forecast but is not presented as a result that is already clear.
Then choose one recurring deviation. For example, salespeople promise deferred payment before approval or quote a discount before finding out why the client is uncertain. The head of sales changes one action and checks the next similar deal.
After a week, you should see specific changes, not “sales of better quality”:
- the expected payment is not confused with the signed contract value;
- the exception has been approved before a promise is made to the client;
- the salesperson has applied the new rule in the next deal without a reminder from the owner;
- the head of sales can explain which sale is worth repeating and which should be stopped or reworked.
One week will not prove that there will be future profit or fix cash problems on its own. It will show whether the team sees the consequences of the terms before they become the company’s commitments.
Where sales management fits in
It was tasks like these that led us at RENTROP to the “turnkey sales management” model. The head of sales manages deals and salespeople every day. The business development director checks that the head of sales manages not only the amount in the report, but also the decisions that create that amount. AI helps find discrepancies in the available data and communications: for example, a promised term does not match what is recorded in the deal record. The head of sales makes the decision.
Strategy, prices, financial limits, the budget and acceptable risk remain the owner’s responsibility. RENTROP is responsible for sales management within the agreed scope: ensuring that the team knows these limits, raises exceptions before making promises to the client and changes how it works after a deviation.
If the team has met the sales plan but the owner has to find money again, you need to check not only how much was sold, but also what the business agreed to repeat.