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Transforming Cash Management

Updated: Aug 27, 2023

An Ascern Advisers Success Story in the Wholesale Sector

In the volatile landscape of international trade, stability can sometimes be an illusion. One of our clients, a small wholesale business, found itself in such a predicament. With a robust track record of importing goods from China and distributing them across Australia and globally, they had enjoyed several years of steady growth. However, a recent foray into new product development began draining their cash reserves. The decline was gradual, making it challenging to pinpoint when the cash crunch would become critical, let alone how to halt or reverse it.

A Comprehensive Cash Management Review

Recognizing the need for expert intervention, Ascern Advisers was brought in to conduct a thorough Cash Management Review. Our analysis revealed actionable insights for both immediate and long-term cash flow improvement. Here's how we transformed their financial management:

Unlocking Cash Through Supplier Financing

One of the key measures we recommended was optimizing the Supplier Financing facilities offered by their large customers. By availing themselves more frequently of this financial tool, they could enhance their daily cash flow. This freed up capital, allowing the business to operate more flexibly.

Streamlining Debtor Management

Next, we tackled their Debtor Management processes. The introduction of automated systems for customer reminders and monthly statements significantly improved cash collection. Specifically, we saw a marked improvement in the payment days of smaller customers by 10%, a metric that directly influenced their liquidity.

Weekly Cash Forecasting for Intelligent Decision-Making

We also implemented a robust 12-week Cash Forecasting model that provided invaluable insights every week. This forecasting tool guided the business in making more informed project investment decisions, thereby aligning their expenditures more closely with their financial capabilities.

The Outcome: Readiness for the Unpredictable

The results were telling. With better cash management strategies in place, the business was able to smartly time several major business improvement projects, minimizing the strain on their already tight cash reserves. This newfound financial stability and foresight proved to be crucial, especially when an unforeseen Business Interruption event struck their supply chain around the Lunar New Year.

Being prepared for such uncertainties not only helped them weather the storm but also positioned them well for future growth and sustainability. This real-world success story serves as a testament to the transformative power of expert financial guidance, something that we at Ascern Advisers take immense pride in delivering.



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