THE BUSINESS
Invoice factoring as a key source of liquidity
This client is a raw food ingredients distributor. Like many businesses in the distribution space, their cash position was heavily shaped by one particular financing mechanism: invoice factoring.
Factoring was a key source of liquidity for the business. When customers owed money, the company could sell those receivables to a factoring provider and receive cash almost immediately, rather than waiting on standard payment terms. But factoring comes at a cost: the provider charges a fee, which eats directly into margins.
THE SITUATION
A tool to reliably forecast which invoices to factor
Without a clear short-term cashflow forecast, the business had no reliable way to know which invoices they needed to factor and which they could afford to collect naturally. If they had enough cash on hand to wait for payment, factoring an invoice was an unnecessary expense. But without that visibility, making that call with confidence simply wasn't possible.
Fract House, the fractional CFO firm engaged by the business, recognised this gap. Rather than building the model themselves, they brought us in to do what we do best.
WHAT I DELIVERED
A forecast so clear they thought it was software
📊 13 week direct cashflow forecast
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A detailed and fully functional, custom-built 13-week cash flow forecast designed specifically around this business's operations.
⚙️ Invoice factoring engine
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Users input all open customer invoices and sales orders alongside and then tag which invoices would be factored. The model would then automatically calculated the new timing of cash inflows and the net amount to be received after fees.
👥 Headcount module
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Users input all open customer invoices and sales orders alongside and then tag which invoices would be factored. The model would then automatically calculated the new timing of cash inflows and the net amount to be received after fees.
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The model included a dedicated headcount module where all employees, salaries, and employment dates could be logged.
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From there, the model automatically calculated and separated out:
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Net salary payments: timed to payroll dates
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PAYE and National Insurance: split out and timed to statutory deadlines
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Pension contributions: treated separately with their own timing
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Employee start and end dates were fully functional. When a team member was leaving, their payroll outflows would drop off the forecast on the correct date. New hires would appear on theirs. Nothing needed to be manually adjusted.
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📃 Operating expenses and assumptions
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A dedicated assumptions tab handled all remaining cash outflows (operating expenses, overheads, subscriptions, and any other recurring costs).
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Each line could be assigned a payment frequency: weekly, fortnightly, monthly at month-end, monthly on a specific date, or manually phased across the 13-week window for anything more irregular.
🔎 Forecast vs. actuals
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One of the most valuable features for ongoing use was the actuals reconciliation module.
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The finance manager could export a transaction-level extract from their bank statements and drop it straight into the model.
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A keyword-matching engine would then automatically tag each transaction to the relevant forecast line item, no manual matching required. The result was an instant, clean comparison of forecast versus actuals every time new bank data came in.
📈 Dashboard
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A simple visual dashboard tied everything together, showing net weekly cash flows and the closing cash and liquidity position across the full 13-week horizon. At a glance, leadership could see exactly where the business stood and where it was heading
🎓 Full training
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The Managing Director and Finance Manager were trained on every aspect of the model and a custom user video guide was recorded specifically for their model so they could refresh their knowledge whenever required.
WHAT A FAB COLLAB
Supporting fractional CFOs to elevate their services
At 13WEEKS we most often find ourselves working alongside the CFOs of our clients. So in situations where the business only has a fractional CFO, then we work with them too. So if you're a fractional CFO and reading this case study, then just know we would love to work with you too.
One of the reasons this project came together quickly was the working relationship with Fract House.
Because a fractional CFO was already embedded with the client, a great deal of context (how the business operated, the key cash flow drivers, the specific pain points around factoring) was already understood before we came in. That meant less time getting up to speed and more time building.
FractHouse could stay focused on their advisory work with the client. 13WEEKS could stay focused on building the model. The client got both, without either party having to stretch beyond their area of expertise.
It's a working model that benefits everyone, and one that 13WEEKS is well set up to replicate with other fractional CFOs and their clients.