Case Study

Challenge

This established manufacturing company had strong market demand but struggled with scaling. Despite revenues of INR 80 crores, the company was constantly battling cash flow issues, stretched production timelines, and inefficiencies that stifled growth. Their working capital was tied up in a production cycle that stretched over 60 days, debt collection lagged behind, and decision-making was often based on outdated financial data.

The Turning Point

When Arth Consulting stepped in as a fractional CFO, the focus was clear—streamline operations and free up cash to fuel growth. The first step was reviewing the company’s Standard Operating Procedures (SOPs). Arth Consulting uncovered inefficiencies in the production process and introduced lean management principles. The result? A production cycle that shrank from 60 days to 30 days. By implementing Just-in-Time (JIT) ordering, the company no longer held excess inventory, freeing up critical capital.

The next challenge was improving cash flow through better debt collection. Arth Consulting reduced the company’s Days Sales Outstanding (DSO) by setting new contract terms with customers and introducing an aggressive but fair collection cycle. This boosted the company’s liquidity and ensured they had the capital needed to scale.

Arth Consulting didn’t stop there. They implemented a detailed Management Information System (MIS), giving the leadership team timely insights into the company’s performance, and coordinated debt and equity fundraising efforts to support future growth.

The Result

The transformation was remarkable. With the production process streamlined, the company’s working capital cycle improved dramatically. Their free cash flow soared, allowing the business to invest in growth initiatives. Arth Consulting’s approach didn’t just solve short-term problems—it laid the foundation for scalable, sustainable growth. And thanks to the improved cash flow, the company was now well-positioned to tackle new markets and opportunities.