Capital Management, Cash Management

Description of Client Company

  • Entrepreneurial owner terminated CFO requiring interim help while making strategic decision as to the future of the company.
Situation as described by Company management: 
  • Management had developed a weekly cash flow utilizing a simple materials requirements planning model to determine cash for materials and wished to continue to use this model.
Engaged for:  
  • Interim Management during possible turnaround period
Situational Appraisal:   
  • Existing cash flow was wrong due to failure to address the “must” pay vendors to keep the business open.  In addition, the simple MRP system did not produce reliable information for cash flow planning
  • The CFO never discussed cash issues with vendors in order to obtain better terms or cooperation from vendors
  • Create weekly cash flow plan
  • Monitored actual expenditures against the plan
  • Balanced extremely tight cash flow
  • Primary contact with vendors, landlord and attorneys during period of tight cash flow

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