Improving Cash Flow
($1.2 Billion provider of engineering, information technology and staffing services )
This Firm was experiencing cash flow challenges due to a high level of accounts receivable.
Some symptoms included:
- Upstream processes were contributing to some of the process inefficiencies and the amount of rework required.
- There was no single version of the “truth” relative to critical business data.
- Significant, on-going efforts were required to service low margin accounts.
- Problems were not being managed from an end-to-end perspective.
- Flowcharted and analyzed the Order to Cash process end-to-end.
- Followed a data-driven approach including:
- Defining the problem and targets.
- Measuring the current performance of the OTC process.
- Analyzing OTC’s performance data with the intent to identify root causes.
- Designing improvements to address the root causes.
- Institutionalizing the changes made.
Within 12 months, the cumulative impact of all the improvements resulted in:
- Reducing the length of the billing process from 6 to 2 days.
- Reducing the outstanding AR balance by 33%.
- Improving the cash flow by 30%.