Contract, Project and Claim Management as well as Supply Chain Management
in the Mechanical Engineering Industry


Finance and Liquidity Management across the Group

Client International plant manufacturer in the energy sector with locations in Germany, the EU, Northern America and P.R. China
Volume About 400 Mio. EUR, in different local currencies.
Situation The individual group companies close contracts with own end users. They fulfil the contracts by own resources as well as sub contracts for engineering and equipment supply to external suppliers and group companies.
Problem The business is exposed to a high influence on the payment flow from clients and to sub-suppliers for key components. A sudden and unexpected bottleneck in substantial dimension has occurred. Such scenarios cannot be excluded for the future. The group of companies does not dispose of an instrument to transparently illustrate the financial flows.
Analysis
  • The method of project execution is rather standardises
  • The group of companies disposes at all locations about the same ERP system.
  • The payment inducing milestones towards clients are already registered for each project.
  • The obligations towards clients for future payments are registered on total amount, but not related to due date and consecutive amounts.
  • Cash-Flow relevant data are being (insufficiently) prepared by different officers in excel files.
Execution
  • Concerning client payments’, a report has been developed, which successively demonstrates uncharged rates, open invoices and incoming funds.
  • Concerning suppliers’ payments an invoice inducing schedule has been implemented. Based on this a report has been developed, which successively demonstrates uncharged payment rates, open invoices and payments effected.
  • The report provides for options for selection as follows:
    • per project,
    • from – to order number,
    • periods, divided to days, weeks and months,
    • overall summation
Success The group companies dispose of a reliable and always current cash flow report. Upcoming underfunding will be recognised in time for pro-active action. Temporary high financial backlog can be efficiently placed on the market.
Further information I gladly provide on request in a personal meeting.