“We’re trying to manage cash… but it’s starting to affect the people we rely on.”
Executive Summary:
- Challenge: High accounts payable (AP) balance and overdue payments affected supplier relationships and credit terms.
- Solution: Review the working capital cycle, prioritize AP payments, and establish a strategy for debt reduction.
- Results: Strengthened supplier relationships, optimized cash flow, and reduced financial liabilities.
What’s Really Happening:
- Overdue accounts payable were creating a strain on relationships with suppliers and disrupting the production schedule.
- The company’s reliance on credit and delayed payments was impacting its financial health.
Blue Oak Consulting’s Role:
We helped the business regain control of its working capital without damaging the relationships that keep it running.
Instead of treating AP as a backlog, we turned it into a structured, strategic priority:
- Reviewed the working capital cycle and assessed AP aging reports.
- Prioritized payments to essential suppliers and developed a debt reduction plan to improve liquidity.
The Outcome:
- Improved supplier relationships and negotiated better terms.
- Reduced overdue liabilities and improved cash flow by effectively managing working capital.
Key Takeaways:
- Efficient working capital management is key to maintaining supplier relationships and financial health.
- Debt reduction plans and timely AP payments contribute to a more stable cash flow.