Every business has a revenue target. Fewer have a profit target that the whole leadership team knows. Fewer still have a cash target — the minimum balance or runway they’ve agreed never to drop below. Yet those two are the numbers that decide whether the business survives a bad quarter.
This guide covers how finance leaders can set those targets, make them visible, and turn them into things the leadership team acts on every week rather than reads about every quarter.
Set three financial targets, not one
For the year ahead, agree three numbers with the leadership team:
- Revenue — the top line.
- Profit — net profit in dollars or as a margin. For a funded startup, the equivalent is a burn ceiling.
- Cash floor — the minimum cash balance, or minimum months of runway, that triggers action if crossed.
The cash floor is the one most often missing. Setting it in advance — “we never go below three months of operating costs in the bank” — turns a future panic into a pre-agreed rule.
Make them visible
In Clarion, record these on the vision board. The one-year goals section has Revenue and Profit goal items built in, and KPI items for anything else — put the cash floor there. The three-year goals hold the longer-range version, and the 90-day goals show this quarter’s share. See build your vision board.
Put the profit target on the vision board and say it out loud in your syncs. A team that knows the profit target makes different decisions about discounts, overtime and spending than one that only knows the revenue target.
Turn targets into monthly metrics
Annual targets are reviewed through monthly and weekly metrics on the finance scorecard. For the three targets above:
| Target | Metric | Frequency | Inverted? | Target value |
|---|---|---|---|---|
| Revenue | Revenue | Monthly | No | This month’s plan figure |
| Profit | Net profit | Monthly | No | This month’s plan figure |
| Profit | Gross margin | Monthly | No | 55% |
| Profit | Operating expenses vs. budget | Monthly | Yes | Monthly budget |
| Cash floor | Cash balance | Weekly | No | The floor (e.g. $300,000) |
| Cash floor | Runway in months | Monthly | No | 6 |
| Cash floor | Receivables over 60 days | Weekly | Yes | $25,000 |
Two tips:
- Set the cash balance target to the floor, not the forecast. Green means “above the line we agreed”; red means “act now”. That’s the most useful signal a cash metric can give.
- Use an inverted metric for spending. Set the target to the budget and tick Inverted metric — spending goes red when it exceeds budget, which is the direction that matters.
Add each with Add Metric on the Metrics page. See create a metric and set targets and inverted metrics. Update the targets on monthly metrics at the start of each quarter if your plan is seasonal.
Turn the gap into milestones
If the plan says 12% net margin and you’re running at 8%, tracking the number won’t close the gap. Projects will. Those are quarterly milestones, each with one assignee, a due date and a definition of done:
- “Reprice the bottom 20% of accounts — new rates agreed and invoiced from 1 July.”
- “Renegotiate the top three supplier contracts — signed at 5%+ lower cost.”
- “Move to monthly billing in advance for new clients — contract template updated, billing set up.”
- “Reduce DSO to 40 days — collections process documented, automated reminders live.”
- “Build a 13-week cash forecast — updated weekly, reviewed in the leadership sync.”
Not all of these belong to finance. Repricing belongs to sales; supplier contracts may belong to operations. Finance’s role is to identify where the gap is and make sure someone owns closing it. See create a milestone.
Review weekly and monthly
Weekly, in the leadership sync. The cash metrics are part of the main scorecard. If cash drops below the floor, it’s a challenge for that meeting, not the next monthly review. Finance milestones get a status update with everything else.
Monthly, in a finance review. Once the books close, run a separate monthly sync for the leadership team. Create it with a Monthly cadence and edit its agenda to fit — for example:
| Step | Time |
|---|---|
| Scorecard (monthly metrics) | 15 min |
| Custom: “P&L vs. plan” | 15 min |
| Custom: “Cash forecast and runway” | 10 min |
| Milestone updates | 10 min |
| Challenge discussion | 25 min |
| Summary | 5 min |
Add content to the custom steps — a link to the month’s management accounts, or a short written commentary — so people can read ahead and the meeting starts from the same page. See schedule a sync and customize the sync agenda.
When the numbers go red
Pre-agree what happens. For example:
- Cash below the floor: freeze discretionary spend; finance raises a high-priority challenge for the next leadership sync.
- Margin below target two months running: review pricing and the three largest cost lines; set a milestone for the fix.
- Receivables over 60 days above target: a named owner contacts every account on the list this week.
Write these rules down in the knowledgebase so they don’t depend on memory. When it happens, raise it as a challenge and work it to an action.
Common mistakes
- Revenue-only targets. Revenue can grow while profit and cash shrink.
- No cash floor. Without one, “is this a problem?” becomes a debate during the problem.
- Finance projects owned by finance alone. Most profit levers sit in other departments.
- Reviewing only at quarter end. By then, two-thirds of the quarter’s result is locked in.
- Plan targets that never change. Re-forecast quarterly; keep the annual target, adjust the path.
For the weekly view founders need, see check company health.