Bad debt, interest rates increase, supply chain issues, increasing competition, rising raw material prices, etc. are different types of risks. Yet, they have one thing in common – negative effect on your company’s cash flow.

Failure to manage these risks properly can lead your company straight into bankruptcy, and nobody wants that. Luckily, there are proven strategies which you can easily implement in your business.

There are three steps to a successful cash flow improvement and risk management:

  1. Identification of key financial risks for your busines – Some risks are obvious, while some are hidden and waiting to materialize. Therefore, a comprehensive analysis of financial risks is a must.
  2. Development of a suitable strategy – whether it is a strategy for liquidity / cash flow planning, managing customer exposures, getting a loan from a bank, or improving your credit rating.
  3. Implementation of the strategy and monitoring – operational implementation and onboarding of the rest of the team is crucial for successful cash flow improvement. Establishing key KPIs is important to keep track of your progress.

Here is a brief overview of some solutions we provide, but keep in mind this is not an exhaustive list.

Cash flow controlling – implementation of the cash flow analysis into the management reporting

The implementation of the cash flow analysis into your company’s management reporting package allows you to transparently manage cash flow and liquidity, equipping you with the knowledge how much money you need for stability of your business. Additionally, this system allows you to understand the repayment potential of your business and facilitates negotiations with creditors and investors.

Given that cash flow and liquidity are the key to the survival of any company, this analytical system is used by leading rating agencies and banks for analysis of their clients' performance. The system includes a dashboard with an analytical form of all three basic financial statements – income statement, statement of financial position, and cash flow. Through adequate mapping, the dashboard leans onto your accounting and/or controlling system.

Rating systems development and implementation

Rating systems enable companies to adequately monitor credit and financial risks in the context of doing business with customers and suppliers. By ranking customers and suppliers, you get a clear insight into the key risks for your company in the entire value chain, and you timely recognize early warning signals of your business partners’ credit deterioration. In addition, rating systems improve internal efficiency through better management of sales and production planning processes. The above results in a lower engagement of working capital and ultimately a higher return on invested capital.

Establishing a monitoring system of the creditworthiness of customers and key suppliers is the first step for the good management of credit and financial risks, with the rating system being its backbone. The second step is the creation of an appropriate credit policy and a strategic plan.

We adapt the rating system to your needs, and it can be in the form of a detailed methodology used by financial institutions (expert system), a rating scorecard for the purpose of obtaining a faster risk assessment (statistical model) ior a combination of the two (semi-expert system).

Credit structuring and business planning advisory

A business plan describes the company's vision and goals, as well as the strategy and tactics that should be used to achieve them. Regardless of whether you are preparing a business plan for internal needs or applying for a loan, this service provides you with the following specific benefits:

  • Assurance that your business plan is adequately prepared and that it clearly communicates key information to all stakeholders, including creditors.
  • You get a "second opinion" and a critical review of all key aspects of the business plan. If we consider the business plan to be unsustainable, we clearly communicate the shortcomings and thus save your money, time, and reputation with creditors and/or investors.
  • We guide you through the process of creating a business plan and together with you present it to creditors and/or investors.

If you are applying for a loan or already have one, you already know that the loan agreement is a key document governing the relationship between the creditor and your company until the loan is repaid. Loan agreements can be extremely complex and contain numerous clauses that must be adhered to. Errors and oversights are difficult to correct later in the process, therefore the correct structuring of the credit transaction from the outset is essential.

Our international experience in evaluating business plans and structuring credit transactions including reviewing contractual documentation from the credit risk point of view, helps you get the best possible conditions with your creditors.

Rating advisory – how to improve a credit rating

The goal of every company that applies for a loan or already has one, is to have the best possible credit rating. On the one hand, it means a lower probability of default, while on the other, it enables more favourable financing conditions in terms of interest rate and loan maturity.

The rating advisory service includes:

  • The evaluation of your company's historical performance as a starting point for creating a strategy to improve your credit rating
  • Creation of a credit rating improvement strategy and assistance in the preparation of a business plan that is in line with the strategy
  • Education on what bankers focus on when evaluating a company's performance
  • Preparation for negotiations with bankers including tips and tricks

Our international experience in assigning credit ratings and assessing business plans helps you get the best possible terms with your creditors.

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