Collection back on track, Working Capital, Business Cash-Flow (BCF)

  • Design
  • Implementation
  • Managment
  • Continuous improvement

ORGANISATION

  • Global Engineering PLC (PE-backed) €8b, 50kFTEs
    • MENA region EUR 400m revenue, 2500 FTEs,

project SCOPE

  • regain control over collection process
  • improve working capital

project GEOGRAPHY

Middle East and North Africa – MENA:
UAE (Dubai ands Abu Dhabi), SAUDI ARABIA, QATAR, KUWAIT EGYPT, BAHRAIN, JORDAN, TUNESIA

FINDINGS

  • very poor collection results in whole region
  • collection performed only by finance department
  • poor control over bad debts follow up
  • lack of knowledge about the non-payment reasons
  • huge bad-debt provisions and write-offs
  • unreconciled balances
  • poor credit control
  • collectors focused on big figures only
  • negative Cash Flow

CHALLENGES

  • KSA and UAE are one of the most difficult countries for collection
  • 8 Legal Entities in different countries
  • Resistance for change
  • Operations struggling to be involved
  • Difficulty in data gathering from existing systems (dispersed data)
  • Finance staff tired and demotivated after so many efforts without results
  • Complicated and not coherent processes in each country

ACTIONS

  • collection follow up system, enforcing control on overdue receivables tracing,
  • engaging operational personnel into collection process
  • running weekly collection calls with local FD, MD and Operations, to discuss TOP 10 debtors and further steps
  • strict rules for permanent not payers:
    • gradual reduction of services provided
    • till end of service and contract closure
  • building regional awareness of the collection importance (through out management and operations)
  • building regional collection call center to follow up with debtors.

DELIVERABLES

  1. DSO reduced by avg 25 days
  2. collection of €10M already written off debts
  3. awareness of collection importance by the operations, not only finance
  4. New collection/BD procedures
    • all significant bad debts (>1 year) are processed in court
    • IT system of invoice collection tracking
    • involvement of operations into collection process
    • strict credit control policy
  5. reliable debtors ledger
    • all invoices are being confirmed before due date
  6. Significantly improved Net Working Capital (€18M)

EXPERTISE APPLIED

Risk Managment

  • risk identification and evaluation
  • promoting risk approach culture

Strategic Planning and Vision

  • Understanding the strategic rationale behind the carve-out,
  • setting clear objectives,
  • aligning the objectives with the overall business strategy

Change management

  • addressing staff concerns,
  • facilitating cultural alignment
  • operational processes streamlining

Project management

  • proper process planning
  • roadmaps preparation and execution
  • efficient resources allocation

DOWNLOAD FILE

Collection back on Track (pdf) – less than 1MB

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