Improving working capital

Our Working Capital Study 2020/21, Navigating the months ahead, is now available

Our latest global analysis of working capital performance looks at how you can prepare for the months ahead, and plot a successful course through future uncertainty.

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Companies which excel in their management of working capital have a real competitive advantage.

Current uncertainties in the global economy and financial markets are putting unprecedented pressures on companies and their supply chains. Against the backdrop of the Eurozone crisis and ongoing volatility in key markets across the globe, company executives across Europe are wrestling with the need to insulate their share prices by balancing revenue growth, earnings and cash flow while shoring up their balance sheets. With investors and rating agencies feeling increasingly exposed, there has never been a more important time to focus on maximising liquidity and free cash flow.

Potential working capital issues

Based on our experience of working with companies to improve their working capital, CEOs, CFOs, Group FDs, Group Treasurers or shareholders are likely to face the following issues:

additional funding requirements due to increased working capital driven by business growth
lack of visibility on cash and working capital performance across the organisation, and entire working capital cycle
lack of cash awareness across departments and geographies, with no working capital targets and incentives
difficult working capital balancing act managing the trade-offs between cash, cost and service
high levels of overdue receivables and bad debt write-offs
sub-optimal controls in relation to setting and managing payment terms of customers and suppliers
broken Sales Operations and Planning (S&OP) process and poor stock visibility; and
poor levels of customer service and On Time In Full (OTIF).

How we can support your business

We can help you overcome your working capital challenges by:

completing a working capital benchmarking exercise to compare performance against peers and identify potential improvement opportunities
performing a diagnostic review to identify ‘quick wins’ and longer-term working capital improvement opportunities
developing detailed action plans for implementation to generate cash and make sustainable improvements
assisting with the implementation of sustainable working capital reduction using robust, efficient and collaborative processes, with a focus on the key levers of:
- process optimisation throughout the entire end-to-end working capital cycles
- compliance and monitoring
- identification and improvement of commercial terms; and
- creating and embedding a ‘cash culture’ within an organisation, where the trade-offs between cash, cost and service are evaluated and optimised.

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Whatever your business challenges or industry sector, we’re available to help you find your best way forward. We can explore your options with speed, imagination and care to find sustainable solutions for you and your stakeholders.

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