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A portfolio company of a private equity group unexpectedly missed payroll, which was a situation that had not been anticipated by the cash–flow forecast. The PE firm had concerns about revenue leakage, which were intensified by the pending sale of the portfolio company. We were asked to investigate whether systemic issues in revenue cycle management were to blame. We were also asked to provide guidance about moving to a traditional shared services model to optimize operations.
We provided a subject matter expert with specialization in shared services to conduct an order-to-cash (OTC) assessment with an emphasis on systems, roles and processes that could be contributing to cash flow volatility and revenue leakage. Over a three-week period, we evaluated the current processes and identified improvement opportunities in billing, collections and cash application to ensure timely revenue recognition.
We identified 10 “quick wins” and provided an implementation roadmap and hands-on execution support over a 45-day period. Our recommendations were designed to support capture and accrual of missing revenue, improve controls to capture future revenue, and optimize cash collection—thereby reducing volatility risk in future cash forecasting. Based on our review, we also provided due-diligence assurances for the pending sale.