An Industrial Project Funded Through Cash Optimization
One of Efficash’s most notable consulting missions took place in the early 2000s with a major French plastics and foundry group. The company faced a significant challenge: it wanted to finance the creation of a new manufacturing plant in Mexico to enhance its competitiveness and improve margins. However, the company had reached its debt limit, and banks refused to grant additional loans.The objective was clear: free up cash within the customer cycle to fund the new plant in Mexico. With no support from banks, the company had to find the funds internally
, explains Scarlett. This challenge required a complete reorganization of the accounts receivable process to reduce outstanding balances and accelerate debt collection. Scarlett and her team worked closely with the company\'s financial and commercial departments to analyze collection practices, identify critical receivables, and implement an action plan to lower the DSO (Days Sales Outstanding) and optimize cash flow. Over 18 months, the mission involved:
- Training internal teams in effective collection techniques
- Implementing tailored monitoring and follow-up processes
- Establishing detailed dashboards for real-time performance tracking
The result? A game-changer: 60 million francs (approximately 9 million euros today) were unlocked solely through credit management optimization. This newly available cash financed the Mexican plant, boosting competitiveness and improving the company’s overall margin.
Reducing DSO in the Healthcare Sector
Another notable success story involved a mission for a leading public healthcare laboratory. The company sought Efficash’s expertise to optimize the DSO of public-sector receivables, which are typically challenging and slow to recover. In this industry, accounts receivable from hospitals and public institutions often create cash flow tensions, despite regulatory payment deadlines. In this case, reducing the DSO was not originally a priority for the group. However, they had an average DSO of 52 days on public receivables, exceeding the regulatory limit of 50 days
, recalls Scarlett. The project kicked off in April 2020 with a quick diagnostic assessment to analyze collection performance and pinpoint corrective actions. Scarlett and her team introduced an intelligent collection solution via My DSO Manager, a tool that automates payment tracking and proactively follows up with public clients. By collaborating closely with internal teams—including credit management and commercial departments—Efficash established a structured and proactive payment monitoring system. Key measures included:
- Automated follow-ups to ensure compliance with payment terms
- Regular interactions with key hospital clients
- Weekly performance reviews to monitor and enforce timely payments
The impact? In just eight months, Efficash helped the client reduce their DSO from 52 days to 39 days, unlocking nearly 17 million euros in cash. This success was praised by the company’s American parent group, which acknowledged the direct impact on cash flow and profitability. Thanks to the methodologies and processes implemented, the client continues to maintain a DSO of around 39 days, well below the industry average.
Conclusion: Success Built on Strategy and Collaboration
These success stories highlight that credit management extends far beyond simple debt collection. When backed by solid methodologies, in-depth analysis of collection practices, and close collaboration with internal teams, credit management can generate substantial cash flow gains—allowing companies to finance their growth projects without relying on external debt.
Stay tuned! In the next episode, Scarlett will discuss how technology is revolutionizing credit management and the digital tools that are reshaping the industry.