Commercial End to End Payment Process

Our team worked with this client to significantly enhance company performance through developing and improving processes.

This major utility infrastructure supplier with a global turnover in excess of £10bn; recognised that they lacked a defined process for their current work in progress (WIP) within their gas infrastructure subsidiary. As a result, payments were being heavily delayed, causing cash flow issues. This constrained the running of their business and their suppliers on a regular basis.



Our team worked with this client to significantly enhance company performance through developing and improving processes, delivering these new processes and ultimately helping to improving the end to end payment process.

£16.1M

Through a prioritisation of projects, £16.1m has been released in just 8 weeks. Of which £9.5m has been released through the top 10 elements previously flagged.

£17M

The value of WIP has reduced by £17m, from £37m to £20m and this is expected to fall further over the coming weeks.

£30k

On average, WIP projects have been reduced from £43,750 to £11,428 over the 8 week period.

Commercial End to End Payment Process

Results

“The implementation of the Budget Board has enabled me (as a Commercial Manager) to have greater transparency on how the contract is performing against the Budgets, and drive action across the disciplines in a way I haven’t been able to do before”
- Paul Dowell, Head of Contracts

“I now have greater interaction with the teams, and can challenge their decision making much earlier on”
- Simon Jude, Manager of WIP and Budgets

“The implementation of the Visual Management Boards has helped us to identify and drive out waste, as problems are much more visible”
- Russell Collins, Finance Manager

Commercial End to End Payment Process

Observations

- Worked with the client to identify the total value of WIP; accumulated to £96m.
- This client did not have a department which dealt with budgets; therefore teams were not working against clear and defined budgets/targets.
- Only 15% of ‘Design Amendments Forms’ were completed correctly for the first time. Analysis identified these forms required a large amount of manual work.
- The operations team were not focused on the order to correctly close projects.
- Historic design amendments forms were not actioned; consequently many of these drawings became obsolete and required additional rework or acted as blockages.
- No prioritisation of projects against their values; low value projects were being completed before high value projects.

Commercial End to End Payment Process

Objectives

- Develop a detailed understanding of their own current processes.
- In-depth considerations of data that relate to project values and importance.
- Accumulate future states process and investigate blockages to achieve this process.

Commercial End to End Payment Process

Actions

- To create a visual understanding, implementations of budget will be presented.
- Role and responsibilities clearly outlined and confirmed across all team members .
- System and report integration to understand and report top 10 value WIP projects.
- Daily meetings referred to short internal control to be implemented in order to quickly improve reporting.