Extra £30 million generated from normal operating cash flow
...extracted through the implementation of robust cash control policies, reporting and follow through.
The Challenge
A public group of companies experiencing a downturn in trading due to economic pressures was struggling to operate within its loan and overdraft facilities. The Banks were seeking assurance from management that the cash position was under control.
The Solution
Very urgent action was needed in these circumstances. An "off line" cash management reporting and control process was quickly designed and implemented.
Key to getting this "bought into", by the 30+ subsidiaries in this £700m international group, was exhorting the group CEO to personally telephone every subsidiary MD to give the appropriate level of authority and priority to the process.
The Result
Within 2 months an improvement in cash flow of £30m had been achieved which immediately reduced the pressure on bank facilities and enabled a measured recovery plan. The business culture had been transformed in the cash management area, without compromising essential investment.
“I had never realised the potential that there was within the businesses themselves to reduce our working capital requirements in this way. We now have a much greater understanding and focus around the whole area of cash management.” - CEO of engineering group
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