-18% Working Capital Reduction to Self-Fund Industrial Growth
An industrial manufacturer with turnover exceeding €15 million had doubled its revenue, but growth was severely straining liquidity. Working capital remained trapped in extended customer credit, early supplier payouts, and premature raw material purchasing.
At a Glance
ONISIS analyzed payment terms, collections, and purchasing cycles for a €15M+ manufacturer. Leadership overhauled credit policies, tied sales incentives directly to collection timing, and aligned material purchases with demand. Trapped working capital fell by 18%, self-funding a 35% growth in net profit.
INDUSTRY
MANUFACTURING
COMPANY PROFILE
Industrial manufacturing company with €15M+ annual turnover.
PRIMARY OUTCOME
-18% Working CapitalSERVICE PILLAR
Cash Flow Optimization→The Challenge: Cash Squeeze Driven by Rapid Revenue Expansion
The owner of an industrial manufacturer with €15M+ turnover had doubled revenue, but operating liquidity was under severe pressure.
As the business expanded, substantial cash was absorbed by working capital: trade receivables, inventory bloat, and unbalanced commercial terms.
The owner saw opportunities for further growth but lacked the liquid capital required to fund expansion.
The question was how to liberate working capital from daily operations to self-fund the company's next phase.
The Financial Diagnostic: Cash Conversion Cycle & Inventory Analysis
Financial analysis uncovered two structural sources of cash flow strain:
First, new accounts enjoyed extended credit terms while suppliers were settled early—cash departed the business long before sales proceeds were collected.
Second, procurement followed theoretical production targets rather than active sales velocity, tying cash up in premature raw material stock.
Management Implementation: Cash-Linked Sales Incentives & Demand-Driven Purchasing
Leadership overhauled commercial credit policies and tied sales commissions directly to cash collection milestones rather than booking volume.
Simultaneously, management introduced demand-driven purchasing schedules, synchronizing raw material procurement with active production orders.
Aligning customer collections and supplier terms liberated substantial operating cash flow.
What Changed in Practice
Every engagement is different. Here, we share the business impact for this specific case
-18%
Working capital
+35%
Net profit
+35%
Annual turnover
To honor the confidential nature of our engagements, client identities remain private.
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