The CFO called us three months before their fiscal year-end. His voice was tense. "We're doing $30 million in sales, but somehow we're losing money. The owner wants answers I don't have."
I've heard variations of this story dozens of times. A plastics manufacturer running hard, shipping product, keeping machines humming—but the cash isn't there. The margins keep shrinking. And nobody can pinpoint exactly why.
What happened next wasn't magic. It was just numbers, accountability, and 90 days of focused work that turned a struggling operation into a 23% more profitable business.
When Good Sales Don't Equal Good Profit
Here's what made this situation so frustrating: sales were actually up 12% year-over-year. The production floor was running six days a week. Customer orders kept flowing in.
But their bank account told a different story. Cash was tight. The line of credit kept creeping up. And when we pulled the actual numbers, EBITDA had dropped from 11% to barely 8% in just 18 months.
The CFO knew something was wrong, but their monthly financials weren't giving him the detail he needed. He could see the symptoms—inventory climbing 28% over the past year, receivables aging out past 60 days, scrap rates that nobody was tracking—but connecting those dots to the profit leak? That's where we came in.
What the Numbers Actually Showed
We spent the first week doing what nobody else had time to do: looking at every product line, every customer, every cost center. The reality was messier than anyone expected.
Their three highest-volume products? Barely breaking even. They'd been quoting jobs based on estimates from three years ago, never updating for material cost increases. One customer alone—their second-biggest—was costing them money on every single order because the pricing hadn't kept pace with rising resin costs.
Then there was inventory. Raw materials sitting in the warehouse for months. Finished goods waiting for customers who'd already pushed delivery dates twice. $1.2 million in working capital just... sitting there. Not working.
And the receivables? Sixty days wasn't the average—it was the best case. Some customers were running 90-plus days, and collections consisted of a part-time admin making calls when she had time.
The 90-Day Plan (And Why It Actually Worked)
We laid out the problem for the owner and CFO in one meeting. No consultants. No slide deck. Just real talk about where their money was going and what needed to change.
First priority: stop the bleeding on unprofitable customers. We showed them the true cost per pound on their top 20 products. Three of them were underwater. Within two weeks, they'd renegotiated pricing with those customers. One walked away. The other two agreed to new terms. That alone saved them $180,000 annually.
Next was inventory. We didn't hire a consultant or implement some fancy system. We just started counting. Daily cycle counts on high-value items. Weekly reviews of slow-moving stock. They found $340,000 worth of material they'd ordered twice by mistake. Another $200,000 in obsolete finished goods they wrote off and sold for scrap.
The hardest part? Getting someone to actually own collections. The CFO assigned it to their controller, gave her two hours every morning, and told customers the new terms: net 30, period. No more 60–90 day floats. Some pushed back. Most paid. Within 60 days, average DSO dropped to 42 days, freeing up another $600,000 in cash.
The Numbers Three Months Later
By month three, the CFO stopped asking us to verify the numbers. He knew they were real.
EBITDA went from 8% to 12.5%. Not because sales exploded—they actually stayed relatively flat. But because every dollar in was now being watched, tracked, and maximized. Scrap rates dropped 18% once the production manager started seeing daily reports. On-time delivery hit 97% because they finally had visibility into what was actually on the floor versus what the system said should be there.
The owner called it a 23% profit increase. Technically accurate. But really, it was about getting back to what the business should have been earning all along if the systems and discipline had been there from the start.
What This Actually Teaches Us
The CFO who called us that day wasn't incompetent. The owner wasn't asleep at the wheel. They were just doing what most manufacturers do: running the business, trusting the numbers would work themselves out.
What changed wasn't strategy or systems—it was attention. Weekly cash flow meetings. Daily production metrics. Someone actually calling customers about overdue invoices. Boring stuff. But boring stuff that freed up $1.2 million in cash and added $700,000 to the bottom line in one quarter.
Six months later, they're still doing those weekly meetings. The controller still owns collections. The production manager still checks scrap rates every single day. Because once you see what's possible when you actually look at the numbers, you can't go back to flying blind.