Issue
A $180 million revenue, $18 million adjusted EBITDA commercial waste management company aimed to grow through capital equipment purchases, new location openings, and add-on acquisitions. However, despite strong EBITDA results, rising accounts receivable, unchecked capital expense, high debt costs, and sporadic vendor payments resulted in declining cash flow, hindering expansion. To increase borrowing capacity, the company needed to improve working capital or boost trailing 12 months EBITDA.
Solution
CBIZ developed a comprehensive process improvement plan for the client’s order-to-cash and expenditures cycles, implementing a new credit policy, standard billing instructions, and cross-functional meetings to resolve overdue customer balances. We introduced customized management tools and templates for cash forecasting, accounts receivable management, and month-end closes. To support refinancing efforts, CBIZ assisted with preparing a management deck for the lender group and handled key controller duties, enabling the new CFO to focus on strategic priorities during the company’s search for a permanent controller.
Outcome
Our efforts resulted in:
- A 15% decrease in days sales outstanding through improved accounts receivable and streamlined order-to-cash processes, lowering working capital needs.
- A robust cash forecasting tool providing visibility into working capital needs over time.
- A return to budget for capital spend in the fiscal year, without additional borrowings.
- A finance organization built to handle the business’s complexities.
- A restructured credit facility allowing for continued growth.
- Increase in days payable outstanding through communication with vendors.
- An inventory management strategy that aligns purchases with usage.
| Company Information | |
|---|---|
| Industry | Commercial Services/Waste Management |
| Ownership Structure | Private Equity Owned |
| Geographic Footprint | Northeast U.S. |
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