Protecting working capital is a lifeline for businesses

The edict that ‘Cash is King’ is never truer than in times of uncertainty. As the impact of COVID-19 brings the resilience and wellbeing of your people front of mind, there’s also an increased need for companies to protect liquidity. Particularly for those in a high leverage model, reacting fast to the changing cash and working capital needs is a crucial lifeline.

Across all sectors there is a rapid shift in working capital requirements, driven by both disruption of supply and demand. Normal lead times and replenishment frequencies are elongated even for regional supply chains, meaning safety stock and inventory policies need to be adapted. Payment moral as well as credit worthiness and insurability are impacting the ability to get paid or trade.

There is a clear need to take rapid action to change operational ways of working to protect working capital and ensure a more accurate cash flow forecast in these uncertain times.

To weather the current storm, it is particularly vital for you to adjust operational behaviours and processes for working capital at pace.

If you want to talk through any working capital or liquidity matter on your business then please contact Daniel Windaus, Working Capital Partner.