A Multinational Corporation in the Industrial Services Industry Experiences a 10-Day DSO Reduction and Improves Cash Flow
A Multinational Corporation in the Industrial Services Industry Experiences a 10-Day DSO Reduction and Improves Cash Flow
Our client had a DSO of 62 days, causing cash flow delays and rising debt. They needed to minimize DSO, reduce their liabilities and boost cash flow to be able to invest in their company’s growth.
The strategic and systematic financial transformation we implemented bore significant results. The engagement reduced the client’s DSO by 10 days, streamlining their cash flow and reducing their debt. We also identified and addressed $6MM in revenue leakage, improving the bottom line. In addition, our comprehensive approach led to a 25% reduction in non-billable overtime, further saving costs, and we halved the number of re-billable credit memos, enhancing billing efficiency.
Read on for more information on how we successfully delivered a positive outcome for our client.
Our client was grappling with a significant financial roadblock: a notably high Days Sales Outstanding (DSO) of 62 days. This elongated DSO led to deferred cash inflow, an inflated debt level, and consequently hindered their plans for expansion. The critical need was to reduce the DSO, enhance cash flow, and thereby decrease debt, freeing up resources for growth.
To tackle this pressing issue, we leveraged our deep expertise in financial transformation and operational efficiency. The approach was methodical: we first identified the root causes of the delays ranging from opportunity identification to order placement, and from order placement to cash inflow. The aim was to understand the bottlenecks in the pipeline and develop effective strategies to remediate them.
To execute this, we assembled a multi-disciplinary team, composed of subject matter experts in operational effectiveness, process improvement, billing, accounts receivable, cash applications, payroll, and technology. This team was responsible for developing and implementing remediation plans to improve our client’s DSO and cash flow situation.
To execute this, we assembled a multi-disciplinary team, composed of subject matter experts in operational effectiveness, process improvement, billing, accounts receivable, cash applications, payroll, and technology. This team was responsible for developing and implementing remediation plans to improve our client’s DSO and cash flow situation.
This case encapsulates our capabilities in driving financial transformation. Our ability to identify underlying issues, design bespoke solutions, and assemble the right team to execute these plans has turned a financial challenge into a strategic advantage. We are proud to have helped our client improve their financial health and create room for future growth.
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