NPCA Newsletter: Avoiding & Dealing with a Cash Crisis
- NP Capital Advisors Team
- 3 hours ago
- 8 min read
Newsletter article summary: Founders can avoid cash crises by consistently tracking two things, money owed to them (AR) and money they owe others (AP), and holding a 30-minute weekly call with their controller and AR/AP manager to review both. This simple habit creates 3-4 weeks of early warning before problems become emergencies, leaving time to act.
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NP Unfiltered Podcast🎤
Check out our latest podcast:
Building to Last: How Toy Brands Compete in a Consolidating Market
It featured a panel with toy industry veterans:
Chris Zaccaria, CEO of Schnerds
Marc Fetscherin, CEO of Bones is Back
Jason Klug, CEO of Klugonyx
Andrew Klepper, Sales Manager for PCA (Packaging Corporation of America)
Nick Desai, Founding Partner at NP Capital
Moderated by NP Capital's own Justin Oltz-Green
Panelists discussed why cash flow discipline separates businesses that survive from those that don't, offered solutions for how to build that cash flow discipline, highlighted how to use AI and technology to give small businesses a real competitive edge, and shared personal anecdotes on running and growing toy brands.
Avoiding & Dealing with a Cash Crisis
Cash crises often look like surprises, but they seldom are.
The warning signs were likely there weeks earlier: invoices aging past 60 days with no follow-up, a handful of large vendor payments all clustering in the same two-week window, or a customer who’d been reliably slow to pay suddenly going completely quiet.
Without a system for seeing signals consistently, founders often don’t notice until it’s the Friday afternoon before payroll goes out on Monday morning.
This visibility problem is one of the most common (and most avoidable) challenges facing founders of growing businesses today, and a big reason why we are such a fan of the 13-week cash flow model – we call it the red-headed stepchild of financial statements, often overlooked and misunderstood, but extremely vital.
The good news is that fixing it doesn’t require a sophisticated treasury system or an expensive piece of software. It simply requires a weekly habit and the discipline to protect it.
The Two Key Variables to Cash Management
Before implementing any tool, process, or meeting, get clear on the fundamentals. There are basically two things a founder needs to track consistently to maintain control of their cash:
Accounts Receivable (AR): every dollar a customer owes your business, organized by how long it’s been outstanding and when it’s expected to arrive by week.
Accounts Payable (AP): every dollar your business owes a vendor, supplier, or creditor, organized by due date and priority by week.
A founder with a live, accurate picture of both at any given moment rarely gets blindsided by a cash crunch. Understanding the gap between money coming in and money going out starts with understanding AR and AP as the two levers you pull to control your cash position at any point in time.
The One Meeting That Keeps You Out of a Cash Crisis
Once a week, get three people on the same call: the founder or CEO, the controller or bookkeeper, and whoever manages AR and AP day-to-day. Set aside thirty minutes at the same time every week and answer the following three questions:
Who owes us money, how much, and is anything overdue?
Who do we need to pay, how much, and when does it need to go out?
What's the net cash position for this week, and does it work?
That's the whole meeting. It sounds almost too simple, but run it every week without exception – through busy seasons, slow seasons, and everything in between – and within 60 days, you'll have more real-time financial clarity than most founders get from a quarterly board update. The consistency is the point. A weekly cash flow call tells you where you're heading and gives you time to change course. It also lets you know who your good customers are and who you pay money to.
What Your AR Tells You About Your Best – and Worst – Customers
Collections represent reality more than revenue does. When you review AR every single week, patterns emerge that you’d never notice by looking at sales numbers alone, and some of those patterns will change how you think about your customer relationships.
On an NP Capital panel, one toy brand founder shared that he requires distributors to pay 40-50% upfront at the time of purchase order, with the balance due within 10 days of delivery. That structure dramatically reduced his financial stress and eliminated the cash gap between what he owed his manufacturer and what he was waiting to collect. This was a simple, proactive move that most founders don't think to negotiate.
Here’s another example most founders recognize: the client placing $50,000 orders every quarter but paying 75 days late is not a great customer. They are quietly borrowing money from you, interest-free, every single month. Meanwhile, the client placing $15,000 orders and paying within 10 days is the customer who’s actually funding your operations. Your AR aging report forces this conversation into the open. Who's current? Who’s 30 days out? Who’s sitting at 60 days with no payment plan and hasn’t returned a call in two weeks?
Knowing the answers in real time allows you to pick up the phone while there’s still a relationship to protect, escalate a collection before it becomes a write-off, and make smarter decisions about where to focus your sales energy going forward. Your AR is a map of customer relationships, in addition to a receivables report.
What Your AP Reveals About Your Hidden Leverage
Most founders are surprised the first time they sit down and look at AP in real detail. This isn’t because the numbers themselves are shocking, but because of the picture that’s revealed when you see every outflow together in one view.
You’ll find vendors you're still paying for a service you stopped using six months ago. You’ll notice that two departments are purchasing the same supplies from two different suppliers at two different price points. You’ll realize that a vendor you’ve paid faithfully on day 30 for three years would likely extend you to day 45 or even day 60 if you simply had the conversation. And you’ll start to see which weeks are structurally heavy on outflows, so you can plan your collections activity around those windows instead of being caught short.
A product development founder we spoke with put it plainly: even with revenue that was essentially flat year-over-year, his company made deliberate cuts to fixed costs and grew EBITDA by 30%, despite navigating tariffs and shifting consumer behavior.
Reviewing AP weekly means knowing what you owe, strategically timing your outflows, identifying savings you didn’t know existed, and building vendor relationships that give your business real financial flexibility when you need it most.
Why An Early Warning Is Critical
When you look at your AR and AP together every week, you start catching problems three to four weeks before they arise. And three to four weeks is exactly when you still have real options.
You can call a customer before their invoice hits 60 days past due, delay a non-critical vendor payment by two weeks without damaging the relationship, or draw on a line of credit strategically with a plan for repayment. You can make a smart hiring or inventory decision based on what’s actually, not aspirationally, coming in.
Those strategies aren’t nearly as accessible when you find out about a problem a day before you send out payroll.
You don’t need a perfect system to start. Put the meeting on the calendar for Tuesday or Wednesday morning – sometime early enough that anything surfaced can be acted on before the week closes. Have your controller pull a simple AR aging report and a list of what’s due to vendors in the next 10 to 14 days. Show up and ask the three questions, and do it again the following week.
Thirty minutes a week that offer consistent visibility is one of the simplest things a founder can do, and is often one of the most valuable.
If you’re looking for more structure around your cash management or need a financial partner to help you build it, NP Capital Advisors works with founders as both an investment bank and a fractional CFO, bringing senior-level financial expertise to businesses at every stage. Sometimes the best thing you can do for your cash flow is have the right people in your corner.
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Industry Headlines
Dunkin’ Owner Inspire Brands Files Confidentially for US IPO
Inspire Brands Inc., the owner of fast-food chains Dunkin’, Arby’s and Jimmy John’s, filed confidentially for a US initial public offering.
The number of shares and price range for the proposed offering haven’t been determined, according to a company statement Friday.
Inspire brought in $33.4 billion in global sales in 2025, according to its website, and had more than 33,300 restaurants across over 2,700 franchisees in roughly 60 markets globally at the end of that year.
Apollo-Owned Auto Supplier Tenneco Is Said to Prepare for IPO
Tenneco Inc. is laying the groundwork for an initial public offering that could value the company at about $14 billion, according to people familiar with the matter.
The company has contacted the Securities and Exchange Commission and banks to start the process for a potential IPO later this year and is working on a prospectus.
Tenneco is exploring strategic options, with an IPO being the leading option currently, as the company and Apollo Global Management Inc. look at ways to monetize the business.
Consumer Sentiment Falls to New Record Lows Amid War in Iran
The University of Michigan’s consumer-sentiment index fell to 48.2 in May, driven by higher gasoline prices.
Year-ahead inflation expectations decreased to 4.5% from 4.7% last month.
The survey highlights a growing disconnect between a relatively solid economic backdrop and households’ perception.
Diageo Sales Gain Driven by Growth in Africa, Latin America
Diageo Plc's organic net sales rose 0.3% in the latest quarter, beating the expected 2.3% slump, due to growth in Africa and Latin America.
The company's performance in North America was weak, with organic net sales down 9.4%, but strong sales growth in Africa, Latin America, and Europe helped offset this weakness.
Diageo's new CEO, Dave Lewis, is working to address the company's issues, including poor service levels and a lack of competitive offers, and will share details of his turnaround strategy on August 6.
Cantaloupe, Inc. Enters into Definitive Agreement to Be Acquired by 365 Retail Markets
("Cantaloupe”), a global technology leader offering end-to-end technology solutions for self-service commerce, announced it has entered into a definitive agreement to be acquired by 365 Retail Markets, LLC ("365"), a leading innovator in unattended retail technologies, in an all-cash transaction with an equity value of approximately $848 million.
365 is a portfolio company of Providence Equity Partners L.L.C. (“Providence”), a specialist private equity firm focused on growth-oriented investments in media, communications, education, and technology companies across North America and Europe.
Upon completion of the transaction, Cantaloupe will become a privately-held company.
About NP Capital Advisors
NP Capital Advisors is a next-generation investment bank and consulting firm founded by a team of experienced entrepreneurs, bankers, and attorneys who have built, operated, and sold successful businesses. The firm offers tailored solutions across M&A, restructuring and turnarounds, and strategy and growth consulting in a variety of sectors. With a performance-driven fee structure and a track record of delivering exceptional results, NP Capital Advisors is dedicated to helping founder-led and emerging growth businesses maximize value and overcome challenges.
This newsletter is for informational purposes only and does not constitute financial, legal, or investment advice.
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