Twelve months ago, a disruption in revenue streams meant that solar roofing company PetersenDean – when faced with an unexpected working capital shortfall – had a choice: delay payments to suppliers while it rebuilt its cash reserve or look for a different solution. Reluctant to do the former, the company chose to implement a supply chain finance (SCF) programme to help solve this challenge – and hasn’t looked back since.
When I went to bed on 14 December 2016, the company was looking into the eye of a storm. PetersenDean had just posted a record year – for both revenues and profits and the next year was looking even better. Sure, cash flow always felt a little tight, but that was a function of our growth. For PetersenDean – and for the rest of the sector – we generally paid our bills faster than we generated revenues. For us, that difference amounted to around 20 days. As a result, we’d drawn most of our credit to support our growth.
Still, so long as we continued at this pace, we’d generate plenty of cash to fund our growth.