Case study 2:

Implementing robust financial and commercial processes into high - tech manufacturer.

SITUATION

The customer was experiencing significant growth. Improvements had been made to its capability through increased manufacturing capability and a process driven environment. The company wanted to secure sustainable growth whilst managing commercial risk but had limited available in-house expertise.

The company had secured some significant long term orders. As the business grew, the Managing Director became concerned that there was a significant risk that the financial and commercial management processes were not adequate to sustain and support the long term growth projections, especially as the company was predominantly a manufacturer. In addition, the market was suffereing a significant downturn which could impact near term orders and thus income.

CONTRIBUTION

  • Implemented a highly visible cash flow monitoring system. The key element of the cash flow was utilising reliable data from operations to predict future cash availability
     

  • Implemented tighter controls in purchasing and other expenditures, especially those not directly contributing to revenue generation.
     

  • Performed an in-depth cost analysis and work with both the commercial team and operations to re-direct focus on the most profitable top 5 customers and most profitable product lines.
     

  • Recovered significant spend on R&D via the governments R &D Tax Credit scheme.
     

  • Worked with operations, customers and vendors to optimise cash flow.
     

  • Developed working models for improved leverage on assets to deliver more revenue.
     

  • Implemented relevant and pragmatic financial metrics, aligned with operations, for weekly review.
     

  • Helped focus on delivering value, not just price.
     

  • Supported the communication of unique value offering, helping the team align around a common purpose.
     

  • Successfully pre-qualified the company for several very discerning International customers.
     

  • Improved both the technical & contractual integrity of tenders and proposals. This was achieved through detailed contractual, cost & margin analysis and alignment with technical & operational capability.
     

  • Drafted, negotiated and managed all related contracts including, but not limited to, sale and procurement, collaboration agreements, joint ventures, claim preparation/resolution, variations and contract management.
     

  • Constructed practical commercial frameworks and partnerships to facilitate new products and entry into new market segments.
     

  • Capitalised on both Operational and Engineering experience to help anticipate problems and provide contingency measures to help avoid delayed income.  

RESULT
 

  • Facilitated a cash flow forecast for next 6 months with improved confidence of maintaining cash within agreed range.
     

  • £1,000’s recovered from the UK Governments’ R & D tax relief scheme. Previously, this had been missed.
     

  • Regular vendor payments helping maintain strong relationships and reliable supply of raw materials.
     

  • All most all of the invoices due (debtors) were recovered within terms.
     

  • Continued good relationship with bank ensuring their confidence that the company would  maintain strong financial health.
     

  • Bank overdraft level was reduced by >75% in line with agreed bank targets.

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