You turn to Accordion.
From day one, we partner with the portfolio company management team to segment and prioritize vendor payables based on: length of relationship, size of annual business, past-due duration, and future product needs. We also work hand-in-hand with the finance and procurement teams to reprioritize as the vendor demands, sales performance, and liquidity picture evolve. Additionally, we:
- Establish a cashflow overlay of your 13-week cashflow model to sensitize liquidity outcomes and inform the required liquidity buffer.
- Utilize cashflow overlay as the basis for a new, bottoms-up 13-week cashflow model build, utilizing key data elements that were previously “estimated.”
- Rapidly create an inventory roll forward to the 30 largest vendors, incorporating recent sales performance, the annual plan, and existing purchase orders in work to identify the location of inventory gluts and a forward inventory forecast that can be incorporated into liquidity planning.
- Identify several areas of inventory over-supply and work with buying teams and management to formulate rapid action plans to bring inventory turns in line with targets.
- Recommend and help institute a Delegation of Authority matrix for large procurement decisions and meet periodically to review liquidity performance and ensure the uses of funds align with the terms of the liquidity infusion.
Your value is enhanced.
We develop a 52-week liquidity and inventory view with base and down-side scenarios, as well as actionable recommendations, and begin execution mid-project. At the conclusion of the project, we present this work, highlighting unsustainable inventory management practices and outlining new financial guideposts in order to meet liquidity targets and avoid future cash shortfalls. As a result, your buying department is reorganized, multiple senior management roles have been augmented, and new processes and tools to enhance both inventory and liquidity visibility are in place.