Revenue Isn’t Cash: The Lifecycle of Money in Business

In this On The Surface conversation, Seth Stevens and Jordan Janet break down the one metric that keeps every business alive: cash. Using plain‑spoken examples—from quarry rock to multi‑month construction projects—they map the full journey from opportunity → revenue → cash in the bank, and explain why profit on paper can hide real cash risk.

You’ll hear how front‑end decisions (quotes, terms, creditworthiness, and relationship building) connect to back‑end realities (billing accuracy, aging reports, finance charges, and collections), and why collaboration across sales, operations, shared services, and accounting is the only way to protect liquidity. The duo digs into milestones and pay estimates, credit checks and insurance, pausing accounts when needed, and forecasting cash needs for payroll, parts, and projects—plus the role site managers play in controlling costs to reduce cash burn.

If you’ve ever wondered why your income statement looks great while your bank balance doesn’t, this episode will help you see—and manage—the difference.

Thanks for listening!

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Transcript

*Automatically generated by AI*

Seth Stevens (00:05)
welcome back to On the Surface, the go-to podcast for heavy construction and general business. am Seth Stevens and I'm here with Jordan Janet. Today, we're talking about cash money and why it's important for businesses. Jordan, what do you know about cash?

Jordan Janet (00:16)
Hello.

I feel like it's important to business.

Seth Stevens (00:31)
⁓ yeah. Well, that's, that's true. I thought it would be kind of a cool idea because you're in sales. I'm in finance by trade. It's an interesting perspective because as a leadership team, we're all responsible for it, but a sales team typically is chasing down the front end, right? And the business, the customers, the deals, all that kind of stuff, trying to bring cash.

in the door and then typically finance teams are analyzing and managing the cash coming in and the cash going out the door on the back end. So it brings some interesting perspectives. I mean, you're eight months into it. I don't know what your viewpoint was on it while you were in safety, but.

Jordan Janet (01:21)
Well, I think it's interesting. You're right. That is an interesting combination. And now being in sales, the sales team is responsible for revenue. We are a revenue generating bunch. That's what we're looking to do. But it's not cash until you get it. So ⁓ now...

Seth Stevens (01:40)
Ooh, fair point.

Jordan Janet (01:45)
to me and I wanted to try to keep this conversation as fundamental as we could so that people listening could have an understanding of what is cash and why is it such a marker on the health of a business. the sales role and we can get into this a little more as we unpack some of these ideas. The sales role is so fun in a cash sense because you generate the revenue with the sale.

But then how quickly you can collect that revenue can greatly impact the health of your cash status. you can make a sale and agree to make that sale. When they actually pick up said product or service or receive said service that they agreed to make, ⁓ how much credit have you now extended to that customer? And how quickly can you collect?

on that revenue from the service or product that you agreed to provide for your client. ⁓ That all resides in the sales team. The revenue upfront, collecting the cash on the backside. Now, you said you're on the backside, and that's true. I'm talking front and backside of the very front.

Seth Stevens (02:49)
Yeah, yeah.

Well, you're talking about the interactions with the customer and stuff a lot of times plus you to your point you are very involved in the whole process. I mean, I don't want to discount that everybody's involved with it and part of ⁓ you know, customer management, relationship management and collecting and spending and you just like did a lot of teasers. You went through like basically the whole cash flow curve and all that kind of stuff, right?

Jordan Janet (03:35)
You know, and the reason I started with that, the reason I hit on that right out of the gate is because I think that relates to anybody and everybody. You know, I mean, if we're going to look at cash as an indicator of the health of the business, everybody kind of has an effect on that because the quicker you get that, the quicker you convert opportunity to revenue to cash, the healthier you're going to be. I mean, you tell me where I'm wrong because

Seth Stevens (03:59)
Yeah, yeah, yeah. No,

no, you're very right.

Jordan Janet (04:05)
And I think a lot of people that don't necessarily understand ⁓ their role in that, they're a contributor. And a lot of that has to do with our relationship with the client, with the customer. ⁓

Seth Stevens (04:18)
Yeah, very good point, mean, it's all, you know, ultimately cash and being a healthy business is when you go log into your bank account, you have money in there, right? Just like if you're at home and you're talking with your spouse or your family or whatever, you log in, you want to see money in your bank account and that's your own personal cash flow as you getting paid by the business from your

paycheck and then making sure that you don't try to spend ⁓ more than what you brought in. So essentially it's the same for business. And you know, one thing that I think is very important that we teach it a lot of internal ⁓ development stuff is Just because we're showing profit or making money on a piece of paper on a profit and loss statement or an income statement doesn't mean that we're doing well. It doesn't mean that we have cash.

⁓ It can easily hide the fact that you don't have cash actually. Because to your point, if you're not working on making the sale, performing the sale, and then collecting the cash, ⁓ you may not be healthy.

Jordan Janet (05:31)
Yeah, you know, I look at it like every transaction is its own cycle. So let's dumb it down to just rock, And aggregates, aggregate sales, okay? ⁓ You got to produce rock that you have sold or will sell. ⁓ That costs money. You're on the very front side, money out.

Seth Stevens (05:52)
Right? Well,

much- of times, real quick, you have to borrow that money on a line of credit, right? So you're paying interest. here we go. day that we're out paying without making a sale yet, we're paying interest. Right. So now jump back in.

Jordan Janet (06:08)
So walking through your life cycle, you've got cost to produce said product. Now you've got that cost sitting in a valuable product on the ground. Now I've got to find in the sales department has to find an opportunity to turn that into, it's got to generate revenue.

Seth Stevens (06:28)
Yeah, because surprisingly enough, you can't buy groceries with rocks. That's right.

Jordan Janet (06:34)
Yeah, it's got to turn it into a currency of some now, right? So finding that opportunity, making the sale, which is just when I say making the sale, that means somebody has agreed to buy your valuable thing for a certain amount of money. Yeah. Right. Now we've got to set them up as a customer if they're not already. ⁓ Maybe they are, maybe they're not. We have to agree to terms on this is

how quickly I'm going to come pick this stuff up, then I'm going to pay it in X amount of time after I pick it up, and then we've got to make sure that we actually do get paid and bring that in, right? Right. So that's when maybe the cycle that I'm referring to in my small little world of sales ends, is when we finally collect what we agreed to collect. And then what's crazy to me, ⁓ and why that is so important to recognize,

is those cycles overlap. Right? Yeah. So that's cycle one. Well, you've already before you ever ended cycle

Seth Stevens (07:31)
I did.

Yeah,

you're already on a hot cycle, Levin.

Jordan Janet (07:39)
You're on cycle 11 before you cycle one ends. Yeah, so your costs start piling up. Yeah, and ⁓ You're borrowing piles up. Yeah reference

Seth Stevens (07:49)
Well, that's the tough part about our business compared to like a retail business where you go in and you buy a product and it's immediately gone. So we have people committing to sales and construction and they're not going to be able, the majority of the jobs that we're quoting is not, they're not going to be sold and acquired in a day. Like they're going to be a week at least.

typically and sometimes months long. So you have cycles in this. You have to work on collecting cash throughout the project. You got to make sure that you bill all of this stuff correctly and timely to keep that relationship healthy so that they're wanting to pay you, right? in my the healthier the relationship is with the client, the more likely you are to get

paid in a timely manner and it being correct. ⁓ So yeah, you have that, the time span that you're kind of dealing with of the ebbs and flows of people picking up material and all that kind of stuff. So you really got to protect yourself as far as collections. You got to stay on top of it. ⁓ Like I said, make sure you're billing. And if there's any big sections of the ⁓ project, like we're really only talking about

Jordan Janet (08:45)
Absolutely.

Seth Stevens (09:11)
rock sales right now, but if you're doing this for a construction project, mean, you should really look at like milestones of completion and build large chunks of the job out so that you can try to collect money to repay yourself for all the costs that you've put into it, let alone, I mean, great ideas are to try to get some of that money upfront, right? And that's why a lot of good, like independent contractors that you have come work at your house on

your roof or whatever is you got to pay half of the price upfront to get on the calendar. Right? So you're kind of committed to it and they get a little cash flow to come do it.

Jordan Janet (09:50)
we do some of that on our commercial side of things in construction. then, you know, as a, if you remember, I did a real brief half-witted attempt at a project manager. So, ⁓ you know, part of that is one the big things that I did is submitting pay estimates for the jobs that I was responsible for, ⁓ You know, how you build your bid.

Seth Stevens (10:01)
Okay.

Yeah.

Jordan Janet (10:14)
When are you going to collect some of that cash? How early in the project so that you're not so far leveraged in that project that your health really doesn't look good on paper at that point, right? And then how quickly does your owner, meaning project owner, the person that you are serving as a construction entity, how quickly do they pay? Because not very quick in a lot of cases.

We now have a dedicated estimating team that will be a big driver of that and being smart about what are we collecting on and when are we collecting on it, you know, how they build their bids affects that. And then, ⁓ you know, collecting on that, you know, when we do actually complete certain segments of the project and we submit a pay estimate, how quickly are we going to collect that? So, yeah, they've got it's interesting every

Seth Stevens (10:56)
Yep.

Yeah.

Jordan Janet (11:13)
aspect of our business has a different life cycle of cash.

Seth Stevens (11:18)
Yeah, for sure. Yeah, because it's ⁓ just because of the nature of our business, it doesn't happen quickly, right? Like there's stages, projects take time and there's stages and all that kind of stuff. So we're kind of talking right there about ⁓ like getting a lot of this stuff set on the front end in negotiations and contracts and bids and stuff like that. What's been your experience

communicating those expectations and stuff up front in a quote for sale of rock or setting a customer up for purchase.

Jordan Janet (11:54)
Yeah, so if it's a new client or a new potential customer, let's say they've agreed, hey, they're going to buy their material from you, from us. I do think it's very important to communicate that right up front, right? And again, you talked about building that relationship. So if you've started to build that trusting relationship with your potential client or you're now agreed upon client, ⁓ you know, being transparent and making sure that they know up front, these are our terms. This is what...

doing business with us looks like. It's definitely going to set you up for success on the, what, on my backside, on the sales backside of actually collecting on that in a timely manner. ⁓ And how well you manage that ⁓ very directly affects that, cash position.

Seth Stevens (12:44)
Yeah,

I agree. Yeah, yeah. Because I think, yeah, keeps that relationship better. I think many times if we're, you know, you get what you give. So if you're transparent and open and honest about stuff, typically we get good communication out of those customers if their accounts end up past due or we need to collect money from them. And really, that's all we're asking for, right? Like, you understand at some points that times are hard, but I mean, one way that we...

⁓ protect ourselves there and make sure that we recoup our financial risk is, you know, to charge finance charges and stuff on people's accounts because, you know, we are paying interest to essentially bank them, right? To weight on money from them. So, we're just kind of a convenient way for them to pay their bill at some point and we have to be...

compensated for that, right? Right.

Jordan Janet (13:40)
So you've set realistic expectations with your clients upfront, with your customers upfront on what your payment terms look like, right? Sometimes, you that you may have to work with a client and we do that ⁓ on occasion on adjusting our payment terms to better fit their needs. ⁓ we will do that from time to time. ⁓ But, you know, you were talking about finance charges.

And that's just, you that doesn't come up in a lot of, that doesn't come up everywhere in our business model, but ⁓ in a lot of ways it does. ⁓ And, you you're rewarding, you're avoiding those finance charges because they're managing their cash as well. Right. So if they're using us, if they're using us as their bank and we're getting hit with interest on that because it's money that we've borrowed. like I was talking about that, that life cycle of cash, you know, we're at a bunch of cost.

Seth Stevens (14:25)
their bank.

Jordan Janet (14:38)
before we ever get you the product that's of value to you, we're out a bunch of cost. ⁓ So those finance charges are just to recoup some of that cost to help keep the health of our business if it's measured upon our cash position in the black,

Seth Stevens (14:53)
Sure, I mean, to your point, you're bringing this up now, but that's a good example of where your income statement would show that you're doing pretty well, but you're owed a lot of money. So you could see an income statement where you're making money for the year, and you could go to your bank account and be like, man, why do I not have any money in here? This doesn't even make sense. It's because people owe you money, so you haven't collected all of your cash, right? Right.

We're talking about customers now and like, you know, working on collections, a way to do that is to make sure that you stay in communication and like monitor all of your ⁓ receivables or like what people owe you, what all your customers owe you and your aging reports so you know how far out those are extending. ⁓

You know, we do that on a weekly basis as a team. So we're communicating not only with the customer, but internally with each other between ⁓ functions of the business to make sure that we're all staying on the same page. We understand that somebody's working on ⁓ the relationship with the customer trying to collect the money and that nobody's going to drop the ball, right? ⁓

And a lot of times those conversations and notes that we put on those accounts helps us forecast what's going to come in in the future. Cause I mean, this is a huge, you know, chasing down cash and stuff on the back end isn't, the fix all right. Like you have to really look into the future of forecasting what we think we're going to collect from people, what we think we're going to need for payroll, for ⁓ parts, for other expenses that come in so that we'd know.

and are prepared for what's coming up and how much we may need to borrow or have prepared in our bank account or that kind of thing, right? And that plays into so many areas of the business, like understanding what we're going to forecast in sales. If, you know, get your crystal ball out, what do you think is going to happen over the next month or two?

So that we can plan for that and what's going to be coming in, how long that's going to age out, all that kind of stuff. So.

Jordan Janet (17:09)
You know, that's those ⁓ those pieces of it are never, you that is a collaborative effort between accounting of, regional accounting, shared services, sales, operations. mean, we're all involved in that ⁓ in that goal, right? In managing that, because, you know, we talk a lot about we talk a lot about all the ⁓ all the soft skills and, ⁓ you know, the emotional, cultural

intellectual side of business, but what's the one reason that any business exists? And that is to make money, to turn $1 into $2. So that's the goal. Why else risk everything that we've risked financially? Safety, you're putting people on the line, as far as this is risky work from time to time. There's aspects of our business that's a health risk.

Seth Stevens (17:46)
make money.

Jordan Janet (18:09)
So yeah, why take that risk if not to, you you have to see a benefit from it and that's what that is. So it's a team effort, it's a collaborative effort to collect that on the end of it all. frankly, that's, I don't know, it's kind of fun. That kind of feels, that piece of it, it's not fun leaning on your relationship and going to somebody and saying, hey, we got a good relationship, but you owe me money and I need it now.

Seth Stevens (18:34)
The fun part, I guess, is like seeing it come to fruition. Yeah. And seeing it through the whole process.

Jordan Janet (18:39)
The

fact that it's a collaborative effort. I'm not on an island by myself. You know, I'm talking to shared services. And when I say me, I mean my team. The sales team is, you know, constantly in touch with shared services, with regional accounting, with regional operations. And ⁓ that piece of it, that collaboration, that teamwork, I think is what, especially when you do see it through and see a way.

Seth Stevens (19:05)
It's almost ⁓ constantly problem solving. Like the chase for the sale never really ends. It's like chasing the sale after the sale, if that makes sense. Because we're like, okay, well, this person has this project. They have this many tons. Okay, they like the price we gave them. Did anybody check what their business name is or their credit worthiness or whatever? Are they going to pay us after we make the sale?

And I think we've actually gotten really good at that ⁓ with our communication processes, with our credit applications, with all the communication that the sales team does on the front end to check this out. And it's just ways for us to reduce risk on the back end to prevent slow paying customers, to prevent not getting cash or having to, know, God forbid, spend more money to collect the money that we're already owed. So...

You know, ways that we do all of that is running credit reports, paying for credit services, running those reports, seeing how they're graded, checking their credit worthiness, whether they have outstanding other payables due or whether they have property liens filed on them or people are coming for their equipment or whatever. Those are probably not people that you want to sell to and expect to collect money on, right? Because they're probably already having issues with that.

Other ways is, you know, just ⁓ something we got into over the past couple of years is credit insurance. So ⁓ basically shifting some risk onto a financial insurance company. So they're saying, yeah, we'll grade them at this and cover them at this amount. And if you have problems collecting it, then we'll put our collections team on it and go get it and take a percentage from you. Right. And that gives us the assurance that

Okay, well somebody is going to cover some money here. So we're not fully out and have to chase it down because that is not our specialty. Our specialty is paving roads and making rocks and selling them, right? Right. And then just following up on that stuff on the back end, like if we're having issues collecting from customers, ⁓ then we can, you know, we can have conversations about pausing, selling them any material or shipping them goods until their accounts paid or

In some poor situations, we have to turn off their account and just make them pay while they pick up material. ⁓ Or, you know, there's performance bonds for projects and things like that. Just any way that you can protect your cash that you haven't even received yet because that's what opens the doors every day, right?

Jordan Janet (21:53)
Yeah,

I think what makes a lot of people uncomfortable about those mechanisms is they feel like it's a kind of negative reinforcement or a negative motivator to try to collect cash that's owed, right? it's also really about managing, like what you're saying, managing that cash flow. You're protecting yourself from putting more cost out there that is a high risk of receiving back on.

because of all the, you know, maybe some of the issues that you highlighted with customers, you know, putting their account on hold, recognizing that they've got a history of bad credit, ⁓ you know, being willing to go seek out that credit insurance because maybe they are a higher risk. You're really managing, you know, I don't want to put even more cost out there that is a high risk of receiving on, right? And I haven't even received on my initial cost with them. I try to look at it more that way instead of

you know, like, you know, negative consequences for trying to collect cash,

Seth Stevens (22:55)
we've already talked about how well we're working together, like sales, finance and cross-functional. ⁓

What do you think? Is there anything else important about cash?

Jordan Janet (23:09)
I was just going to say, why is cash so important? I think we highlighted that in a lot of ways throughout this conversation, but people want to talk so much about profitability and profit is the key indicator of a business's health. If you're not collecting on that profit, if it's just revenue that's out there and it's not realized cash,

What's it really doing for you? Until it does, you know? So that's why I think cash is an important marker. It's an important indicator that we talk about in all these different directions that we've just unpacked.

Seth Stevens (23:45)
Yeah, yeah, yeah. No, you make a good point. I mean, none of that stuff can stand on its own. Like you got to use everything together because if you're not tracking your profit, you're not getting great reports on whether you're making good business decisions. Yeah, but you definitely need to make sure that you're following up and collecting your cash because

Jordan Janet (24:01)
I don't want to take away from that.

It's

not just one thing. So why is cash an important piece of it? Well, this is why. How leveraged are we? Or not?

Seth Stevens (24:18)
Right. I think oftentimes we usually talk about how it's not all about profit and you got to look at your cash because just society and business in general looks at a lot of profit statements. I mean, when you file your taxes, you're putting together an income statement and that's, you're seeing on paper what you should have made as a business, but that doesn't mean that you collected it all. And definitely in like,

corporate environments like ours, I mean a lot of ⁓ decisions and performance are based on your income statement and like how many good decisions you've made and stuff like that and you could have really Poor cash position if you're only paying attention to that. So, yep Yeah, just utilizing everything together to fully understand the picture and healthier business for sure

Jordan Janet (25:15)
And I think conversations like this are important because, you know, everybody needs to have that full understanding to understand their role that they play. Yeah. And as I highlighted earlier, it's a team effort. ⁓ You know, it is a collaborative effort. everyone needs to understand the piece of the puzzle that they are. And when we work together for the overall win.

Seth Stevens (25:36)
Yeah, for sure. You know, that made me think of one thing real quick is how people can be keyed in to ⁓ how they affect those decisions and changes and how they affect cash. Some things that we would always do is, know, really good site managers have a really good understanding of all their costs and controlling it. And so just by them controlling their costs helps control our cash out.

It doesn't necessarily, they don't have to be involved in, who it is or when we're sending it out. It's just, if you control those costs, it helps it on the way out. And then we would look at, you know, how many days overall pass to do our sales and how much did that amount to an interest that we paid. Because that helps people put a dollar amount to it and say, well, I'm also part of this client.

customer relationship like they're coming to me and talking to me during the day at the scale house or ordering asphalt mix from me or whatever. So I could directly impact that relationship just by making it a good experience and maybe, you know, nudging them in one way or the other, not taking away from the sales team, but nudging them to help them pay because the faster we can collect that money, the less we're going to pay in these interest numbers and stuff and

You know, that's been an eye-opening way, I think, ⁓ to let those site managers know how much that ends up amounting to whenever we're not collecting money. Yeah, guess just wrapping up a couple things. ⁓ So, profit on paper isn't everything. Understanding and being involved in the whole cash process and your different sets of financial statements and how they play together.

⁓ We talked about saving our future selves by ⁓ negotiating good terms on the front end with our customers buying rock or ⁓ in construction projects in the way we bid. And then staying in lots of communication early, often, all the time with several different people throughout the organization and functions, providing a good experience for them and ⁓

All right. As always, if you're not already following our show, please do also go ahead and rate it and leave a review wherever you're listening and check us out on all social media platforms at Delta Companies and our website at delta cos.com.

Jordan Janet (28:19)
Thanks for spending the time with us. Check in next week.