How CFO Services helped a 40-year-old design company recover ₹8.5 crores in receivables, and build the financial discipline to make sure it never piled up again.
₹8.5 Cr recovered · 1,535 → 385 debtor accounts · 5 months
The Situation: A Profitable Business That Was Quietly Bleeding Cash
On paper, this company looked fine.
They had been in the design business for over 40 years, carried a strong brand name, and were doing ₹24 crores in annual revenue with 40% EBITDA margins. The second generation had taken over, a managing director in his late 30s with an international education and a clear vision for growth.
But there was one number that kept bothering him: ₹14 crores sitting in receivables.
That’s more than half their annual revenue just… waiting. Clients owed money the company had already earned, and no one seemed to know exactly who owed what, or why no one was chasing it down.
The Diagnosis: Two Problems Hiding Behind One Symptom
When we came in, we did what we always do, looked at the financials, spoke to the team, and mapped out how money actually moved through the business.
What we found were two separate problems feeding each other.
Too much comfort, not enough pressure. The company had been profitable for decades. Promoters had taken a conservative approach to distributing profits, which meant reserves had quietly piled up. Their Current Ratio was 7:1, far higher than any business needs. When the bank account always looks fine, no one feels urgency. And without urgency, nothing changes.
Collections were running on autopilot. Invoices went out. Sometimes. Payments came in. Sometimes. There was no structured follow-up system, no aging analysis, and no clear ownership between the accounts team and the sales team. Everyone assumed someone else was handling it.
The two problems were connected. Because there was always liquidity, there was never pressure to collect. And because there was no pressure to collect, the receivables just kept growing, quietly, invoice by invoice, year after year.
What We Did: Three Moves, in the Right Order
Step 1: We deliberately reduced the slack.
We began moving excess funds into the promoter family’s subsidiary investment company. This wasn’t about stripping the business, it was about creating the right kind of pressure. When the finance team started feeling the squeeze, they started paying attention. Fixed deposits that had been sitting blocked against expired bank guarantees were identified. Funds that had been invisible for years suddenly became visible.
Step 2: We rebuilt the collection process from scratch.
We started with an aging analysis, something the company had never consistently done. Once you can see exactly which invoices are overdue by how long, you stop guessing and start prioritising. We established a structured follow-up cadence: calls, emails, escalations, all tracked, all owned by specific people.
Step 3: We created a task force with one job, clear the backlog.
The team mapped all 1,535 debtor accounts sitting inside that ₹14 crore pile. They prioritised invoices older than 365 days and started working through them systematically. Weekly review meetings kept everyone accountable.
What they found during follow-ups was revealing. Some clients had never received their invoices. Some had already paid, but it hadn’t been reconciled. Several had genuine disputes that had been sitting unresolved for months, sometimes years. Every single one was now handled directly, for the first time.
“Some clients hadn’t even received their invoices. Years of revenue was uncollected not because of bad clients, but because of a broken system.”
The Results: Five Months Later
Once the process was implemented and consistently followed, the numbers moved fast.
- Receivables dropped from ₹14 crores to ₹5.5 crores
- Debtor accounts reduced from 1,535 to 385
- ₹8 crores was freed up and transferred to the subsidiary for new business investment
- All of this happened in 5 months, without a single write-off
The remaining ₹5.5 crores reflected the current, active business, not years of accumulated inaction.
More importantly, the company didn’t just fix the backlog. They fixed the system. The aging analysis, the weekly review meetings, the clear accountability between accounts and sales, those stayed. The problem hasn’t come back.
Outsourced Accounting Services: Frequently Asked Questions
What are outsourced accounting services?
Outsourced accounting services involve hiring experts to manage your financial processes like bookkeeping, receivables, and cash flow.
How do outsourced accounting services help reduce receivables?
They create structured follow-ups, aging reports, and accountability systems to ensure faster collections and reduced outstanding dues.
Why are high receivables harmful for a business?
High receivables block cash flow, making it difficult to pay expenses, invest in growth, and maintain financial stability.
What is debtor aging in outsourced accounting services?
Debtor aging is a report that tracks how long invoices remain unpaid, helping prioritize collections and improve cash flow.
Can outsourced accounting services improve cash flow quickly?
Yes, by fixing systems and collections processes, outsourced accounting services can unlock stuck cash within months.
Does Your Business Have Money Sitting in Receivables?
If your receivables are high and you’re not sure why, or you know why but don’t know how to fix iIf your receivables are high and you’re not sure why, or you know why but don’t know how to fix it, our outsourced accounting services can help you find the answer and act on it. We’d be happy to start with a conversation.
📞 808-020-3333 ✉️ info@cfoservices.in 🌐 www.cfoservices.in
