Manufacturing 64 staff, $18M revenue · 9 months, retainer continuing
Freeing $2.1M of cash from a precision machining shop
A profitable machine shop that kept running short of cash. We rebuilt the monthly close, priced jobs on real machine hours and cut the time from order to cash nearly in half.
Days to turn an order into cash
Before
71 days
After
38 days
The company was profitable on paper and short of cash in practice. Revenue had grown from $11M to $18M in three years, the credit line was drawn to its limit most months, and the owner was approving payroll one week at a time.
What we found
Three things were holding cash: customers on 60-day terms who were paying in 85, raw material bought for jobs that had slipped, and invoices raised only when a whole order shipped rather than at each stage. None of it showed in the annual accounts.
What we did
We moved the monthly close from day 24 to day 8, built a 13-week cash forecast the owner reviews every Monday, and introduced stage billing on jobs over $50,000. We repriced the twenty largest part families on actual machine hours; four of them had been sold at a loss for two years.
The result
Order-to-cash fell from 71 days to 38. The credit line has been below half its limit for six consecutive months, and the bank extended the facility on better terms at the annual review.