Working capital optimisation credentials
Tourism industry
Our client had been provisioning significant amounts for bad debt over the previous three years. Furthermore, client balances were not reliable because of invoice errors and unallocated payments. The collection was a labour-intensive process because of historical billing errors, client complaints and unmatched payments.
Our project approach consisted of three steps:
- First, the individual client accounts were cleared. This was done by allocating payments, analysis of non-allocated payments and permanent monitoring of suspense accounts and client balances.
- Secondly, a recovery plan was installed. The plan incorporated a monitoring of the top 50 clients, individual meetings with the top 25 clients and the introduction of a dunning procedure.
- Thirdly, the process was redesigned and a number of controls were enforced to avoid a similar out-of-control situation in the future.
Telecommunication industry
Our client struggled with a significantly low performance on stock accuracy and inventory rotation. To tackle this, we designed and implemented a new material planning process. The success of the project started with dedicated material owners that were responsible for material replenishment and net requirements calculation. It also incorporated a periodic obsolescence review and the implementation of a monitoring performance dashboard. Apart from improved control over inventory accuracy and the material return flow, the project resulted in an inventory reduction of 31% in a period of ten months. An additional result was a significant reduction of reported issues with the external warehouse provider and the subcontractors.
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