Working Capital - Fast Cash
Capital requirements were becoming increasingly important to this mining company to meet debt requirements and to improve economic results.
- Secure immediate working capital benefits by capturing $50 million in cash from Accounts Payable within 14 weeks.
- Developed key performance indicators to monitor sustainability.
- Improved DPO from 12 to 20 days.
- Introduced sustainable processes that continue to improve DPO.
Improve Working Capital: Deliver Fast Cash
Capital requirements were becoming increasingly important to this mining company to meet debt requirements and to improve economic results during a recent economic downturn and related drop in commodity prices. Having experienced significant profitability in prior periods, the company needed to change a culture accustomed to significant revenue, large profits and corresponding positive cash flows. Management was challenged to quickly improve working capital by extracting cash from the supply chain. The Highland Group was enlisted to find “Fast Cash” working capital improvements. (Additional opportunities to improve working capital and reduce costs would be addressed in a subsequent phase of work.)
A detailed analysis revealed the immediate changes that were needed in business practices and operating procedures. The first step involved changing a culture rooted in paying vendors early. Rapid and measurable financial results were realized through the implementation of new processes around the purchased order and payables functions, staff training and the development of a management dashboard with nine key performance indicators (KPIs) to ensure the sustainability of results.
- Partnered with client teams to implement a System For Managing Accounts Payable.
- Improved processes for operating Accounts Payable and for monitoring and managing results.
- Captured Accounts Payable “Fast Cash.”
- Reduced carrying costs and transaction costs with increased application of early payment discounts.
- Established Category Analysis processes in conjunction with Contract Management processes.
- Established policies, procedures and metrics to manage contractors.
Released cash of
“The Highland Group worked with us to capture cash quickly by implementing new processes which are ensuring sustainability of our improved cash position.”
Chief Financial Officer