“Last week, I met an engineering procurement company owner who had just delivered equipment worth 2 crores, but couldn’t pay his vendor’s 50,000 rupees invoice.
Kya aap bhi kabhi is situation mein phase hain? Project complete, client khush, but bank account empty?
Here’s the shocking truth – most engineering procurement companies are cash rich on paper but cash poor in reality. Today I’m going to show you exactly how to fix this.”
“Hello! I’m Milind Bibikar, and for the past 11 years, I’ve been working specifically with mid-sized engineering procurement companies across India.
Whether you’re supplying industrial equipment, manufacturing machinery, or handling turnkey engineering projects, maine dekha hai ki sabka same problem hai – orders toh mil jate hain, but cash flow ka system nahi hai.
Agar aap ko bhi lagta hai ki business grow karne ke bajaye, sirf cash flow manage karne mein time waste ho raha hai, then this video is going to change everything for you.”
“Let me share what I call the ‘TCFB System‘ – Tracking, Collections, Forecasting, and Buffers. These are the four pillars that will transform your engineering procurement business.
First pillar – Tracking. Most companies I meet are tracking the wrong things. They track project progress, equipment delivery, but not cash flow milestones.
I worked with a Pune-based company that supplies packaging machinery. They told me, ‘Milind sir, humein pata hi nahi chalta ki next month kitna paisa aayega.’ They had 12 ongoing projects, but zero visibility into when payments would come.
So we created a procurement cash flow tracker. For every project, we tracked four critical dates – purchase order received, equipment dispatched, installation completed, and payment received. But here’s the key – we also added expected payment dates based on client payment history.
Within two months, they could predict their cash inflow for the next 90 days with 80% accuracy. No more guesswork, no more sleepless nights.
Second pillar – Collections. This is where most businesses lose money. They think once equipment is delivered and commissioned, payment will automatically come. But that’s not how it works.
We implemented a milestone-based collection system. Every project now has clear payment milestones – 30% advance with purchase order, 40% on equipment dispatch, 20% after installation, and 10% after successful commissioning and training.
But the real game-changer was our follow-up system. We created automated reminders that go out 5 days before each milestone payment is due. Not after it’s overdue, but before. This simple change improved their collection rate from 65% to 92% within six months.
Third pillar – Forecasting. This is where EPCs can really gain an edge. Unlike other businesses, your cash flow depends on project timelines, import clearances, installation schedules.
We use a 16-week rolling forecast specifically designed for engineering procurement. Why 16 weeks? Because most equipment procurement cycles take 12-16 weeks from order to payment.
For each project, you forecast cash inflow based on project milestones and client payment behavior. For cash outflow, you forecast based on supplier payments, import duties, installation costs, and operational expenses.
I remember working with a textile machinery supplier in Coimbatore. Through forecasting, they discovered that their cash flow was most stressed during monsoon months because client factories had production delays, which delayed their final payments. Once they identified this pattern, they started planning their supplier payments around these seasonal variations.
Fourth pillar – Buffers. Most engineering procurement companies operate hand-to-mouth because they think maintaining cash buffers is wasteful. But this is dangerous thinking.
We implemented a buffer strategy specific to engineering procurement – maintain cash buffer equal to 60 days of operational expenses plus 15% of your largest project value. This might seem high, but engineering procurement has unique risks – import delays, equipment failures, client payment delays.
Here’s how we build it systematically. Every month, set aside 8% of your collections into a separate buffer account. Don’t touch it unless there’s a genuine emergency.
Let me give you a real example. A chemical equipment supplier in Mumbai implemented this system. Earlier, they used to reject urgent orders because they didn’t have cash to pay suppliers upfront. After building their buffer, they could take on premium urgent orders that carried 25-30% higher margins. Their annual profit increased by 40% within one year.
The most important aspect of this TCFB system is that it’s designed specifically for engineering procurement challenges. Import financing, equipment warranties, installation timelines, client approval processes – everything is factored in.
Once you implement this system, you’ll move from reactive cash flow management to proactive business growth. You’ll know exactly when to push for collections, when to negotiate with suppliers, and when to take on new projects.”
“If you want to implement this TCFB System in your engineering procurement business, I have something special for you.
I’ll send you my ‘Engineering Procurement Cash Flow Tracker’ – the exact template I use with my clients. Plus, a detailed setup guide that shows you how to customize it for your specific type of equipment and projects.
Comment ‘ENGINEERING’ below, and I’ll send you the download link within 24 hours. This template has helped engineering procurement companies improve their cash flow predictability by 75%.
Aur agar this video helped you understand cash flow management better, please like and share with other engineering procurement business owners who might be facing similar challenges.
Remember, engineering procurement businesses don’t fail because of lack of orders – they fail because of poor cash flow systems.
Build your system today, and scale your business tomorrow!
See you in the next video!”
