Case Studies sapientis-social-responsibility

Industry: Mining

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    Industry: Mining

    The challenge:

    A mining company was struggling with their business finances, including cashflow management and were struggling to service their debt.

    Key aspects of our solution

    • Monthly reporting has been lagging for a few months and this was impacting the ability of the management team to make informed decisions based on timely reporting. Our first focus was on improving the efficiency of the monthly reporting process to ensure that reporting was more timely. 
    • Aspects of their transactions were complex and with our assistance monthly reporting was enhanced in terms of accuracy and completeness to enable the client to make decisions based on accurate financial reports.
    • We also walked the client through the journey of understanding key financial ratios and metrics to focus on, in order to be able to quickly gauge business financial performance and focus on problem areas.
    • As reporting improved in terms of timeliness, we dived into analysis of their monthly financial transactions, it became clear the business had outgrown their financial reporting system. We spearheaded the upgrade of their financial reporting system and were now able to get project reporting which enabled better analysis of business performance.  It soon became clear that a limited number of their divisions were performing well financially and carrying the entire business including some loss-making divisions which were contributing to draining business cashflows. It also because clear that certain contracts which appeared lucrative contractually were loss-making due to deviations between planned service levels and actuals due to client mining operations including some simple elements such as shift start and end times which impacted daily productivity.
    • Areas of overheads which were contributing to draining business finances were also addressed and we developed finance polices and procedures to improve cost management, asset management and transfer of assets between operations amongst others.

    Value derived

    Our team worked very closely with the in-house finance team for 12 months, with the following value unlocked:

    • Timely accurate financial reporting, through a financial reporting system that was more appropriate for their type of business, to support decision-making.
    • Renegotiation of loss-making contracts and non-renewal of loss-making contracts to focus on profitable clients.
    • Improved debtors management and collection of long-standing balances which were straining cashflows
    • Restructuring of debt facility supported by realistic financial projections to alleviate cashflow strain on the business.
    • Improved cost management. 
    • Enhancement of the internal control environment through new finance policies and procedures.
    • Mentoring, coaching and skills transfer to in-house finance team
    • Empowerment of management team through key financial metrics to monitor in terms of business financial performance.
    • Improved business financial governance.