An internal system for controls was also set up to ensure that systems were updated on a regular basis with any changes to terms and conditions in contracts. For example, if Procurement sets up a new supplier agreement and changes the standard payment terms from e.g. 30 days to 45, it is important to ensure that these changes are registered in the accounting system for the benefit in cash flow to be realised. Efficient cross-functional communication is therefore an integral part of the Smart Cash project. An essential tool for measuring progress in this transformation process are KPIs set by management at all levels of the organisation. To return to the example of the vessel coming into port, a natural KPI for Operation Control would here be to measure how fast the invoice is sent to the customer. KPIs at all organisational levels help form a shared understanding of how delays in every link of the process hurt the company’s overall competitiveness, and action plans ensure continuous follow-up on KPI progress. To achieve the transformation to a true cash mindset and culture, all parts of the organisation needed to be involved, not least top management. Every single member of the executive team was involved and committed to Project Smart Cash, not only the CFO, and Smart Cash was on the agenda at both steering committee meetings and internal executive meetings throughout the entire project period. An essential element of getting the entire organisation involved was communication, and Nordic Tankers published no less than three booklets on Project Smart Cash and made use of their intranet, town hall meetings, etc. to ensure that no one was left in the dark and to keep motivation high by continuously reporting on progress. THE VALCON HOW Valcon’s extensive experience with cash flow improvements and transformation processes, not least within the shipping industry, shows that the difficult part is not necessarily to identify the issues or to set up KPIs to measure progress. The difficult part is to change the day-to-day behaviour as there is truth in the saying “old habits die hard”. But Valcon never leaves a project before the desired results are achieved, and the cultural change is implemented throughout the organisation. In the Smart Cash project, Valcon assisted by defining and implementing initiatives, including setting up KPIs and related actions. We even visited the land-based stock facilities to ensure that clean-up initiatives for non-moving items had been carried out. In other words, Valcon goes all the way. THE RESULT S Nordic Tankers is beginning to see signs of a cash culture with organisationwide focus on cash flow and liquidity. The individual functions have also begun to have faith in the processes, eliminating the need for buffers in deadlines. Jean-Yves Lancestremere, Treasury manager in Nordic Tankers, who has been the internal project leader, defines the overall learning from this project as “Don’t work harder but smarter.” Improvements so far include: • Better payment terms with both suppliers and customers • Faster and accurate invoicing with increased focus on outstandings • Optimisation of stock • Using the possibility of free loans from SKAT, the Danish Customs and Tax Administration (“eksportmomsordningen”) • Establishment of KPIs to measure efficiency in the issuance and collection of freight invoices and demurrage • Ensuring internal control related to new processes/targets SECTOR Industry EXPERTISE • Business transparency
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