“We’re making sales, so why does cash always feel behind?”
Executive Summary:
- Challenge: Extended AR terms strained liquidity and operational funding.
- Solution: Implement shorter payment terms without compromising customer relationships.
- Results: Improved cash flow by 15% within six months.
What’s Really Happening:
- Overly generous credit terms delayed receivables.
- Cash was coming in, but not fast enough to support daily operations.
- Limited working capital affected the company’s ability to cover expenses.
Blue Oak Consulting’s Role:
We helped the business rethink how cash actually moves—not just how revenue is reported.
Instead of forcing aggressive changes, we built a strategy that balanced cash flow improvement with customer retention:
- Analyzed customer payment patterns and adjusted terms accordingly.
- Gradually introduced shorter terms to minimize customer pushback.
- Communicated value and maintained strong client relationships throughout the transition.
The Outcome:
- 15% improvement in cash flow over six months.
- More predictable and stable liquidity for day-to-day operations.
Key Takeaways:
- Adjusting AR terms can quickly enhance liquidity.
- Thoughtful communication and gradual change preserve customer loyalty.