Cash Flow improvement

How We Improved Cash Flow by 22% for an SME Client

Overview

A mid-sized trading business was facing continuous cash shortages despite consistent sales growth. The company frequently relied on short-term borrowing to manage day-to-day operations.

The Challenge

• Delayed receivables (60–75 days cycle)
• Excess inventory blocking funds
• Poor visibility into cash inflows/outflows
• No structured cash flow planning

Our Approach

We conducted a cash flow diagnostic analysis, focusing on:

• Accounts receivable ageing
• Inventory turnover
• Vendor payment patterns
• Monthly cash flow trends

What We Did

• Introduced a rolling 13-week cash flow forecast
• Implemented customer payment follow-up system
• Identified slow-moving inventory and reduced excess stock
• Optimized vendor payment cycles without affecting relationships

Impact

• 22% improvement in available cash flow
• Reduced dependency on short-term loans by 30%
• Improved liquidity visibility for decision-making

Key Takeaway

Cash flow issues are rarely due to lack of sales—they are usually due to lack of visibility and control.