Commercial Support

Summary

Deecon were engaged by Aquamain UK Ltd to support on four key workstreams related to their commercial function:

• Contract Management and establishment of a Commercial Function

• Debt Resolution

• Building Final Accounts

• Supplier Spend Optimisation

The project aimed to strengthen Aquamain’s commercial capabilities and supplier management as they transitioned from a sole water self-lay provider (SLP) to a multi-utilites (MU) provider.

The Requirement

Deecon were engaged to enhance Aquamain’s commercial capabilities and supplier management as they transitioned from a SLP to a MU provider. This shift was due to evolving developer demands, increasing pressure to strengthen commercial awareness, and ongoing complexities from engaging electrical and gas subcontractors for the first time. Following a series of challenges with developers and subcontractors, Deecon were engaged by Aquamain to assist with four key workstreams to improve commercial awareness and readiness.

The Solution

Workstream 1: Contract Management and establishment of a Commercial Function

Contract Management

• Reviewed the As-Is position of the upstream and downstream agreements

• Provided a new Upstream Agreement, Downstream Agreement, and full Terms & Conditions, to address Aquamain’s updated requirements

• Trialled the upstream contract on a new project and revised it based on concerns raised by the developer
  
  

Commercial Function

• Workshopped with the Client team to build an As-Is picture of the project lifecycle, functions adjacent to the commercial function, and commercial tasks being undertaken by the various departments

• Mapped out a To-Be process flow for the entire commercial function as well as the processes for raising applications for payment, variations and abandoned jobs

• Provided documentation to simplify tracking and raising of applications, both internally and to the end client

• Provided a comprehensive guide on the commercial function, the role of the commercial team, process ownership, accountability systems, information tracking and project follow-through

• Developed recommendations for the effective implementation and transition to a fully formalised commercial function

Workstream 2: Debt Resolution

Claims

• Assessed documentation related to a potential claim and provided Aquamain with a strategy to mitigate the current risk and prevent future claims

• Integrated learnings into Workstream 1 to future-proof and mitigate the risk of claims

Debt Management

• Reviewed invoices and correspondence for projects with overdue payments

• Assessed invoice emails to determine the timeline of last warning to inform next steps in Debt Recovery Strategy

• Prepared client correspondence for overdue payments with gradual escalation and drafted a proposal letter outlining a payment schedule

• Developed a strategy for engaging with developers to facilitate payment:

  • Final notice issued from the Head of Finance, accompanied by relevant invoices

  • A formal letter, prepared using the Deecon-designed template, detailing the outstanding invoices and amounts due, issued by the Head of Finance

  • If no response was received within a specified period, a second letter would be issued by a third party on Aquamain’s behalf, indicating that stronger measures will be taken should non-payment continue

  • A final letter sent by Aquamain or on Aquamain’s behalf proposing a payment plan on Aquamain’s terms

  • Further dispute resolution methods and their pros and cons were outlined to Aquamain as a next step, including debt collectors, negotiations, mediation or the courts

This process was adopted by Aquamain across five accounts, with successful results.

Workstream 3: Building Final Accounts

Deecon were given three recently completed projects to analyse and verify the margins estimated in the initial quotes.

• Analysed quotes, labour data, and invoices

• Built a final accounts analysis by comparing quoted amounts, actual project costs and amounts invoiced, and tested expected margins

• Finalised accounts for the three projects and provided recommendations and insights. These included the need for detailed tracking, particularly on small scale projects where variations from quoted values have a significant impact on margins

Workstream 4: Supplier Spend Optimisation

• Reviewed historical quotes sent to Aquamain by gas and electrical subcontractors

• Conducted a preliminary benchmarking exercise, establishing a general price per 100 plots for electrical work

• Researched industry rates, including outreach to Deecon’s extensive industry network to provide Aquamain with insight and context around the rates given

• Provided Aquamain with recommendations to improve subcontractor relations and maximise returns on supplier spend by building strong relationships, increasing trust, and reducing rates with larger volumes of work and mutual benefit

The Results

Deecon delivered several final outputs and recommendations for the Aquamain team:

• Upstream contractual documentation

• Downstream contractual documentation

• Full Ts&Cs

• Commercial Function Guide

• Variations and Abandoned Jobs form

• Three late payment letter templates

• Final Account documentation

• MU rates analytics

The project resulted in the formalisation of agreements with developers, and the formation of a debt recovery process. It also outlined subcontractor management documentation and processes and achieved the recovery of 66% of late payments due.