Post-drawdown monitoring
After drawdown: write monitoring as triggers
“Continue monitoring the business” is not actionable. A useful plan says what to watch, how often, and when to escalate.
Translate conditions into monitoring actions
Break each condition into metric, source, frequency, owner, and trigger action. A minimum cash buffer may use weekly bank balances; if breached, the sheet should name who investigates and when they report, not merely turn red.
| Area | Metric | Frequency | Trigger |
|---|---|---|---|
| Liquidity | Minimum cash buffer | Weekly | Below HKD 1,200,000 |
| Collections | Receivables over 60 days | Monthly | Above 18% |
| Leverage | Net debt / EBITDA | Quarterly | Above agreed covenant |
| Trade flow | Top-customer share | Monthly | Above 35% |
When two warning signals appear together
Assume cash falls to HKD 1.1 million, below the illustrative HKD 1.2 million threshold, while receivables over 60 days rise from 14% to 19%, above the 18% trigger. Cash alone may reflect payment timing; together the signals call for a collection review.
Separate fact, explanation, and next step. The fact is that two triggers fired; a possible explanation is three disputed invoices; the next step is an updated ageing schedule and collection plan, reviewed on an agreed date.
Keep trend, not just the latest month
Retain consecutive months and metric definitions. If the denominator for overdue receivables changes from total to eligible receivables, record it; an apparent improvement may otherwise be only a definition change.
A trigger is not automatically a default
An internal warning level, a formal covenant, and a payment default are different concepts. Escalation or remediation must follow the legal documents, applicable policy, and verified data, not an illustrative threshold.