Halving Debtor Days.
A Finance Driven Cash-Flow Turnaround in Manufacturing Sector
The Challenge:
Excessive debtor days constraining cash flow
This medium-sized manufacturing business was grappling with slow debtor turnover, which placed continuous strain on cash flow.
At its peak, the average debtor days stood at 97.
As the business sought to scale operations and invest in R&D, the finance team lacked the tools and strategy to manage receivables proactively.
Payments were inconsistent, credit terms were poorly enforced, and follow-ups lacked rigour.
The Approach:
Strengthening credit control and debtor management
I began with a full diagnostic of the accounts receivable function, mapping payment cycles, identifying recurring late payers, and reviewing terms across the client base.
I restructured the credit control process and implemented a collections dashboard to allow weekly visibility into outstanding invoices.
Clients were segmented by risk and size to tailor follow-up strategies.
Key measures included:
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Training internal teams on credit policy enforcement.
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Introduced penalties for overdue accounts.
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Establishing automated payment reminders and follow-up protocols.
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Building closer alignment with sales and customer service to ensure consistent messaging.
In parallel, I embedded a culture of accountability through weekly aged debtor meetings and regular cash flow forecasting that linked receivables directly to operational planning.
The Result:
Debtor days cut by over 50%, unlocking working capital
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Average debtor days fell from 97 to 46 over 12 months.
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The improved working capital position enabled self-funding of several growth initiatives without drawing on reserves or debt.
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Senior management gained real-time visibility over receivables, improving decision-making and capital allocation.
