Case Study - Construction Industry

The Business Challenge - Consulting

A construction company with a turnover of over £4.3m was having serious cash flow issues due to problems within their credit control department.

Amril was contacted and after an initial meeting we found that 32 percent of their customer base was paying between 90 - 120 days.

The second challenge was then to evaluate the system processes, policies and procedures to effect change.

Solution

The first priority was cash flow, did the company have enough cash to sustain the business whilst action was being taken with the credit control department, it was found to be tight but sustainable, and if necessary we would have brought in specialist financial support.

Getting on the phones was the priority; get as much cash to bank a feasibly possible without alienating their customers but being proactive in drawing out the slow payers and being effective in the chasing cycle.

Results

Jointly we made a significant impact on their collections over the coming weeks, which effectively started to impact on the high use of the overdraft facility by reducing its use and effectively bringing in a cost saving within a very short time.

Once we had started to manage the collection cycle, we looked at the whole receivables conversion period as this was a very important step to accelerate cash flow.

We are still working for the client and have regular monthly meetings to keep everything on track.