Solving a Cash Flow Crisis for a Distributor

CLIENT: A Queens-based distribution company

Challenge

The business had a significant cash flow problem caused by a disconnect between accounts receivable and accounts payable. They were slow to collect client payments, and their payables had to be met within a short window, leading to a cash crunch.

Solution

Bespoke Business Advisory was hired to fully assess their cash flow system. We implemented cash flow forecasting and developed KPIs focusing on Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO). Additionally, we renegotiated payment terms with suppliers and introduced early payment incentives for customers. Through these efforts, we stabilized cash flow and improved the business's ability to pay off debts and invest in growth.

Outcome

Within six months, the successful interventions led to a 20% increase in cash reserves, a 30% reduction in payment delays, and the ability to take advantage of supplier discounts for early payments, which boosted their profit margins.

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