ABL Advisory

Duff & Phelps Assisted a Recruitment Agency with Cash Flow Forecast Modelling


About the Company

The Company specializes in providing recruitment services to the construction industry. Annual turnover was c.£6m and the Company operated with a £1m invoice discounting facility at the time Duff & Phelps was engaged.

Duff & Phelps' Role

Duff & Phelps initially assisted the Company by preparing a detailed short-term cash flow forecast, which highlighted forecast excess funding requirements throughout the period. Duff & Phelps was then engaged to monitor the cash flow forecast on an ongoing basis in order to provide the Company’s key stakeholders with visibility on its cash flow requirements.

As a result of trading with multiple low credit rated and slow playing customers, the Company experienced restrictions on its invoice discounting facility which created significant excess funding requirements. Sufficiently detailed forecast modelling was therefore an essential part of the Asset Based Lending provider supporting the business.

Duff & Phelps’ forecast modelling created the visibility against working capital requirements that enabled the lender to make informed decisions and support its client. This eventually resulted in the invoice discounting facility being operated within agreed limits again.