Are you checking these TWO numbers?
There is a fisherman who can look at the water and tell you exactly where the fish are.
No guesswork. No luck. Just years of reading the signs that most people walk straight past.
The best company directors I have worked with do exactly the same with their numbers. And there are two magic numbers that very few directors ever ask about. More on those in a moment.
If you would like a reminder of the six numbers every director should know, add your email below to download your free checklist. No charge. No catch.
But today I want to talk about the two that most directors are not tracking. And right now, in this climate, they are the ones that matter most.
The first is your debtor days. How long are your clients actually taking to pay you?
If that number is creeping up, it is not just a cashflow inconvenience. It is an early warning signal. Because clients who start paying slower are often clients who are starting to struggle.
You have to nail this trend like your business depends on it. Because it probably does.
The second is your creditor days. How long are you taking to pay your suppliers? If that number is going the wrong way, you know it before anyone else does. You can act. You can fix it now, while it is still fixable.
The average director finds out his creditor days are going the wrong way when the supplier puts him on stop. Now he is borrowing really expensive money. If he had come to me six weeks earlier, I could have cut his interest rate in half.
Together, those two numbers tell you a story about the health of your business that your bank balance alone will never show you.
Own them. Check them every single week without fail.
Because the fisherman who reads the water does not just catch more fish.
He never comes home empty-handed.
I am Mark Smillie. Have a great Thursday.
And if business finance ever comes up, you know where I am.