Enabling Insourcing of a Critical Liquidity Evaluation Tool

Jun 12, 2020 |
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Client

An IT service management solution company

When our client was facing liquidity issues defaulted on loan covenants, they turned to RGP to support them with lender-required cash flow reporting.

In the past, our client had relied on other third parties to prepare 13-week cash flow forecasts. But when those engagements ended, the process was never transferred back to them, leaving them without the expertise to satisfy current lender requirements.

What We Did

  • Created a 13-week cash flow forecasting model and streamlined weekly process for preparing the forecast and variance reports.
    • Used Accounts Receivable historical days-to-collect to predict timing for future collections.
    • Included special analysis for collections on yearly licenses.
    • Accounted for payment plans negotiated with certain vendors.
  • Trained our client to take over the weekly preparation process and reviewed and submitted final versions to the lenders on a weekly basis.

Impact

  • Prevented further lender actions by satisfying requirements for cash flow forecasts.
  • Enabled our client to refinance their debt by focusing on improvements in business operations and cash flow.
  • Enabled our client to take on preparation of 13-week cash flow forecasts and avoid the expense of engaging third parties for such support.
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Client

An IT service management solution company

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