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Case Study

Reputable European Retail Distributor Retains DLC to Triage & Elevate $8B Business Unit’s Working Capital Process

Overview and Project Background

The $8.5B North American branch of a global logistics and distribution was going through a transition period requiring tighter control on receivables and cash flow.  Legacy practices and systems plagued their Order to Cash process, leading to substantial aging of accounts receivable.  DLC was engaged to remedy the existing aged AR as well as reorganize the existing Finance support teams, repair intercompany interactions, and construct actionable reporting out of the legacy systems.

With a proud history dating back over 150 years, the client had purchased two previously competing firms within the last few years.  Having sorted the management teams and still in the process of integrating cultures, the need to quickly refocus on core functions became evident.

While IT worked to converge systems and Operations continued selling and delivering, Finance was adrift with little visibility into the metrics which makes the function effective.  The Financial Statements gave direction, but didn’t provide enough detail to execute on.  The low-level transaction detail was too much information to coalesce into a coherent set of finance tasks.

The DLC Approach

DLC launched into a multi-pronged approach, quickly understanding that solving each issue sequentially would not result in a sustainable solution. Immediately identifying that AR collection efforts were stymied by lack of visibility into detailed invoicing alongside multiple billing channels creating confusion between actual vs. accruals, DLC proposed a novel plan to alleviate the pre-existing AR aging while reformulating the receivables process and the interaction within the larger context of the operations teams.

DLC Executed:

  • Analyzed and created collections protocol for prioritizing aged Accounts Receivable
  • Developed cross-functional support for Finance, enabling proactive approach to working capital
  • Launched intracompany mgmt. reporting to allow insight into Financial metrics, eliminating requests for information

The Results

Receiving executive approval to proceed, DLC successfully collected 80%+ of the aged AR within 90 days while implementing processes to between sales and finance reduce the cash conversion cycle by over 65 days.

As there was substantial data analysis involved, DLC was able to produce Power BI reporting and dashboards to the management teams, moving them from a reactive organization to a proactive one.

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