How Strategic Financial Planning Reduced Debt by 40%.

When a major manufacturing plc had been acquired by a global organisation in a £250m deal, an Oakwood Resources interim manager delivered financial strategy and debt reduction to get the business back in the black.

The challenge:

  • Following an ERP implementation seven months prior to the sale, debtors had been neglected and increased significantly with a resulting negative impact on cash flow.
  • A lack of strategy and urgency within the credit team had resulted in overdue debt at 22% of total debtors – this represented a historical high. There were significant unreconciled balances in related general ledgers.
  • Customer focus had been neglected in favour of fire fighting and dealing with internal rather than external challenges.

The solution:

  • A focus on results achieved a significant impact by selecting initial quick wins to gain momentum.
  • Undertook a full ledger review to ensure that all doubtful items were fully provided for at audit and to identify key challenges for further analysis and resolution.
  • Met with auditors and credit insurers to explain the handover strategy and agreed renewal of insurance cover on existing terms for the acquiree.

The result:

  • Post audit a significant bad debt recovery was made with the surplus provision returned to profit.
  • Overdue debt was reduced to 5% of the total, which related to a few known issues that could be resolved. GL balances were reduced and fully reconciled.
  • Successful on-deadline handover of the debtor book to the acquiring shared service team at the close of the project, with the migrated debtor book 26% lower than at the project's commencement; this ensured a positive impact on cash flow during the project.

Client Testimonial:

“Bringing in an interim manager from Oakwood Resources was transformative. Their strategic focus streamlined our financial operations and directly tackled our debt issues.

This intervention was crucial for integrating the new acquisition smoothly and restoring the financial health of the business."

- CEO

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