PE-CXO’s Success Stories cast a spotlight on private equity-backed operators and the tools and tactics they leverage to create real value. In each entry, a world-class executive details a practical solution to a critical business issue. To be featured, contact mallory.stokker@pe-cxo.com with the subject line “Success Story.”
Executive: Sven Doerge, CFO at Hyperion Solutions, a PE-backed elevator machine component manufacturer
Challenge: Managing and forecasting cash and adjusting pricing to maximize flexibility and profits
Solution: Improving banking systems, increasing flexibility, and tracking product success to free up cash and maintain prices
Ensuring a Reliable Cash Forecast
Every week, we forecast the next 13 weeks of cash flow, and then we freeze our cash flow projections for the first of the month. Then, we track how those weekly cash flows measure up against our projections and net cash from the beginning of the month. From there, we normally track the last three months for cash. We have a simple chart where we can compare how good our cash position is compared to what we said it would be three months ago. Just by having those graphs, we can see where cash is or isn’t coming in. Of course, it’s always related to timing. You have more control over the outflowing cash (Accounts Payable). But overall, you’ll be able to tell if you are actively managing towards your cash position by following this strategy.
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