CASH-FLOW-BASED SOLVENCY ASSESSMENT IN TECHNOLOGY SERVICE COMPANIES WITH SAAS REVENUEMODELS: A CASE STUDY OF SERVICENOW

Cash flow management is crucial for technology service companies to sustain operations, drive financial growth, and mitigate risks, particularly for firms generating revenue through continuous operations or project-based engagements. Many providers operate under delayed payment schemes, creating a time lag between service delivery and cash inflows. Subscription-based models (SaaS) can provide predictable revenue streams but often require substantial upfront investments before the project is completed. Key challenges in managing cash flows include irregular revenue from project-based payments or delayed client settlements, significant upfront costs for talent acquisition, R&D, infrastructure, and rapid expansion that may strain liquidity if not properly managed. This research aims to develop a cash-flow-based solvency assessment model using ServiceNow, a leading capitalized technology services company, as a case study. The authors address current cash flow management challenges, highlight managerial specificities, and propose a new approach to evaluating solvency, focusing on the role of cash flows from operating, investing, and financing activities in managing short- and long-term debt obligations. The scientific contribution lies in assessing the influence thresholds of these cash flows on solvency maintenance. The regression-based solutions identified in the case study are practically applicable to other organizations in the technology services sector.