Managing Global Liquidity and Revamping the 13-Week Cash Flow
A $650mm global consumer electronics manufacturer, with operations in the United States, Europe and APAC, was facing challenges in forecasting working capital needs and inventory. Accordion revamped the company’s global 13-week cash flow projection model which highlighted short and medium term liquidity needs and a need for a capital infusion. As part of the engagement, we were also tasked on an ongoing basis to assess modeling weaknesses, develop and execute forecast improvements, implement cash conservation guidelines and controls, and evaluate additional liquidity levers.
13-Week Liquidity Forecasting
- Met with CFO, Director of Treasury, and the Global CFOs and Controllers to understand current forecast methodologies and consolidation process
- Worked with company key stakeholders to redesign global cash flow forecast templates, consolidation process, and variance reporting in order to provide required liquidity visibility
- Reviewed receipts and disbursements on an ongoing basis to determine opportunities to improve liquidity situation and working capital requirements
- Built processes to tighten controls around OEM disbursements
- Negotiated payment terms with manufacturing vendors to reduce short term liquidity requirements
- Worked hand-in-hand with the company’s CFO to provide a liquidity assessment to board and sponsor
- Reviewed and modeled the covenant requirements, as set forth by the senior lender, in order to assess and test implications of a refinancing solution
- Supported conversations between sponsor and lender to reach a refinancing solution
- Continued to manage and own cash flow forecasting processes and variance reporting on an ongoing basis until a full time Treasurer was hired
Accordion brought liquidity management best practices and tools to the company’s globally dispersed finance team. We developed a more robust and routine cash forecasting process, helped evaluate various liquidity options and developed scenarios to analyze potential outcomes.
Ultimately, a refinancing was achieved that permitted the company to continue focusing on its core operations, and the updated 13-week cash flow forecasting process continues to provide senior management insight and visibility into the company’s liquidity and working capital needs.