Cash Management: Today’s Top Marketing Issue

The Challenge

Today’s business environment is confusing, filled with more choices, more complexity and more at stake for you and your company than ever before. With tight credit markets, companies have a harder time obtaining additional funding. Lenders need to clearly see and understand the changes to your: business model, customer value proposition and how these changes will generate additional sales, profits and cash flow. Asking for more money to execute the same strategy will not move you to the top of the lender’s favored client list.

Three Fundamental Issues

Today companies are scrambling to solve three issues:

  • They have revenues, but no earnings, or

  • They have profits, but no cash, and

  • Needed working capital is trapped on the Balance Sheet in either Inventory and/or Accounts Receivables

Most executives view these situations as a financial issue; we believe the root cause lies on the marketing side. Solving one, two or all three issues requires you review, analyze and adjust your marketing strategies.

The Solution: Make Marketing Financially Oriented

Numerous articles have been written about the disconnect between Sales & Marketing. A great subject for another time, but it won’t solve today’s cash crunch. Today’s primary disconnect is between Marketing and Finance. The financial impact Marketing has on a business is significant, but often not well understood and much of the time not measured.

A key example is the Return on Investment formula. Marketing impacts both the Margin and Turnover side of the formula. Having Marketing focused on both sides will help free-up and drive cash into the business. This requires marketing personnel who: understand the mechanics of the business and can develop and implement cash generating strategies. So often marketing is viewed as an expense when in fact, managed correctly is a revenue, profit and cash generator.


Leave the cost and expense cutting to the Finance side of the business. Solving the working capital issue long-term will require changes and improvements in your “go-to-market-strategy” and internal processes. Managing and measuring three or four key elements will produce the positive cash trend companies are seeking. These elements may include your: customer mix, product lifecycle management, terms and conditions of sale and demand forecast process.

Remember cash management needs to be an on-going company goal, not an epic project. If not a constant, you will lose focus and the cash crunch cycle will repeat itself.


Charles Pavia is a marketing and corporate development executive who has profitably grown businesses in the consumer, industrial and direct trade channels. He is known for his ability to blend strategic thinking and marketing creativity with financial and analytic skills. He holds an MBA from the University of Southern California and BS in Marketing from California Polytechnic University, Pomona. Chuck is a founding member and former president of the Orange County Chapter of the Association for Corporate Growth.

All contents © copyright 2009 by Charles Pavia. All rights reserved. No part of this document or the related files may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise) without the prior written permission of the publisher.

1 Comment

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One response to “Cash Management: Today’s Top Marketing Issue

  1. Thanks for putting this out there, Chuck – you’re “right on the money”! Cost cutting has reached the limits of its effectiveness at many companies today. It is time to grow revenues again!

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