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Representative scenario
Manufacturing / make-to-order production · Revenue €3.2 m · 18 employees · 9-month engagement
A manufacturing business with €3.2 m in revenue managed its liquidity mainly through the bank balance. A 13-week cash flow, job costing and receivables monitoring show how 14 fewer days to collect can reduce the capital tied up by around €123,000.
The financial problem
The profit and loss account was not the problem: the company was working and invoicing. The problem was that cash always arrived later, and nobody knew when. Liquidity was read off the day’s bank balance, which is a snapshot of the past, not a forecast. Every tax deadline or loan instalment thus became a last-minute negotiation, and the cost of that disorder — overdrafts, deferred payments, discounts granted to bring receipts forward — appeared in no account.
The starting point
The tools we put in place
Before and after
| Indicator | Before | After |
|---|---|---|
| DSO — days sales outstanding | 78 days | 64 days |
| EBITDA margin | 6.8% | 9.4% |
| Time to close the reporting | 25 days | 8 days |
| Average cash forecast error | around 27% | around 8% |
| Capital tied up in trade receivables | — | around €123,000 less |
The scenarios shown are for illustrative purposes and are built on recurring dynamics in SMEs. The economic figures are examples and do not represent a promise of results.
What this case teaches
Working capital is the first cash available in a business, and it costs no interest. Before asking for a credit line it is worth asking how many days of collection can be recovered: on €3.2 m of revenue, each day is worth around €8,800.
01 — Method
The four-phase path that supports expansion, reorganisation and business crisis, to make your company competitive, organised and ready for sustainable growth — or for building the value that a future exit requires.
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The offer for business owners and SMEs: from outsourced financial leadership to management control, from business crisis to budgeting and business planning.
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Starting point, what we did and the result in three representative scenarios: cash, margins and the sustainability of an investment.
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If you recognised yourself in this starting point, the first step is always the same: an honest picture of the numbers. Write to me to arrange a first, confidential and exploratory conversation.