Case study 2:
Implementing robust financial and commercial processes into high - tech manufacturer.
SITUATION
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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.
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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
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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.
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Implemented tighter controls in purchasing and other expenditures, especially those not directly contributing to revenue generation.
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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.
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Recovered significant spend on R&D via the governments R &D Tax Credit scheme.
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Worked with operations, customers and vendors to optimise cash flow.
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Developed working models for improved leverage on assets to deliver more revenue.
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Implemented relevant and pragmatic financial metrics, aligned with operations, for weekly review.
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Helped focus on delivering value, not just price.
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Supported the communication of unique value offering, helping the team align around a common purpose.
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Successfully pre-qualified the company for several very discerning International customers.
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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.
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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.
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Constructed practical commercial frameworks and partnerships to facilitate new products and entry into new market segments.
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Capitalised on both Operational and Engineering experience to help anticipate problems and provide contingency measures to help avoid delayed income.
RESULT
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Facilitated a cash flow forecast for next 6 months with improved confidence of maintaining cash within agreed range.
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£1,000’s recovered from the UK Governments’ R & D tax relief scheme. Previously, this had been missed.
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Regular vendor payments helping maintain strong relationships and reliable supply of raw materials.
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All most all of the invoices due (debtors) were recovered within terms.
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Continued good relationship with bank ensuring their confidence that the company would maintain strong financial health.
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Bank overdraft level was reduced by >75% in line with agreed bank targets.
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