Working Capital Optimization

We help release cash from operations to finance your growth and strategic initiatives by optimizing your working capital.

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Working capital optimization – Release cash for growth & investments

Time is money and you have cash tied to your day-to-day operations.

Finance your growth or strategic development initiatives by releasing cash from your own operations instead of using external financing. We help you to improve your profitability and release cash from the balance sheet by optimizing your working capital.

 

 

Working capital optimization is a cross-functional effort of the entire organization. By improving visibility to the key operative processes, waste and delays can be eliminated – may that be shortening lead times, optimizing the inventory levels to better match the demand or extending the time suppliers are paid.

All in all, these actions aim to reduce the time you have money tied to the operations and having the cash in the bank account faster.

Improving cash flow by optimizing working capital is an organization wide cultural transformation that – when executed properly – leads to sustainable results and also enables future improvement of your profitability.

Working capital optimization ebook

Free eBook

Learn the basics of how to execute a successful working capital optimization project.

 

Download now

Working capital optimization is not only about releasing money, it also makes you a stronger player in the market

Working capital - control over operational processes

Increased control over your key operational processes

As working capital is the best indicator of a company’s operational effectiveness, it is related to all your key operative processes. Working capital optimization relies on fact based and transparent understanding of the key process drivers and metrics. Hence, allowing your organization to make informed decisions and putting the focus to where it counts.

Working capital - Improved capabilities

Improved capabilities to drive your profitability

Optimized processes rely on cross-functional co-operation with silo breaking mentality, improved knowhow and capabilities to respond to challenges. By strengthening the cash culture in your organization you improve the ability to make decisions that takes all perspectives of profitability into account.

Working capital - improved cash flow

Permanently improved cash flow performance

At the end of the day, it is the results that count. Systematic optimization of working capital leads to permanent improvement of your cash flow and profitability. Additionally, the improved processes and transparency allow your organization to respond to changes in your business environment in a more flexible manner.

What we do

See examples of what we actually do with a different kind of working capital related challenges. Click forward to see symptoms of the challenges, how to solve them, what the impacts are and related customer cases and blog posts.

 

Customer’s are not paying on time
High Overdues
  • Creation of global overdue management process​
  • Clarified roles and responsibilities regarding the whole dunning process​
  • Creation of Accounts receivable and overdue reporting
  • Increased collaboration between sales and finance functions lead to improved situational awareness​
  • Amount of overdue payments reduce significantly
Low focus on supplier payment terms
Low Accounts Payable
  • Payment term analysis​
  • Discount and rebate analysis​
  • Payment policy revision​
  • Training of sourcing department and purchasers of indirect services​
  • Creation of “handbook” for purchasers​
  • Structured negotiation of supplier terms
  • Greatly improved Days Paid Outstanding (DPO)
  • Consolidation of suppliers lead to more streamlined supplier base and, thus, more efficient supplier management
Customers demand longer payment terms
Rising Accounts Receivable
  • Complete revision of customer credit policy and collection process​
  • Updating contract templates from a cash flow perspective​
  • Creation of an acceptance process for non-standard terms​
  • Creation of credit policy ​
  • instructions for sales​
  • Training the new policy and processes to sales and finance organisations
  • Halted the increasing trend in Days Sales Outstanding (DSO)​
  • Improved level of customer credit term management
Long delays in invoicing ​the delivered service (especially in maintenance services)
High amount of un-invoiced work in progress (WIP) in the balance sheet
  • Invoicing process mapping​
  • Invoicing process redesign​
  • Creating transparency to the invoicing process by selecting the key process phases and defining data needs for those phases​
  • Setting up reporting for all organizational levels
  • Created visibility to the invoicing process and its key phases​
  • Greatly reduced invoicing delay in invoicing process with a road map for future improvements
Focus on gross margin lead to neglecting the inventory levels in retail business
Low inventory turn
  • Training the category managers of inventory turn’s role in total profitability (Earn & Turn)​
  • Creation of visual tools that allow category managers to easily identify the parts of their product portfolio that have below requirement performance​
  • Revision of assortment/portfolio management process with a clear focus on both margin and inventory turn targets
  • Culture change from P&L focus to total profitability​
  • Improved both inventory turn and inventory profitability (Earn & turn)

How we work - From a business case to measured sustainable results

We work hands-on with our customers to build the insights, visibility and tools needed to improve capabilities, empower people and achieve measurable profitability improvement, now and in the future.

We have tested our ways of working in 300+ projects, releasing millions of euros. Read more about our Changemakers toolbox, project framework, and pricing on How we work -page:

Read more how we work with you

 

Book a meeting

Should we discuss how you could release cash for your growth and investments?
Book a meeting from Maria's calendar or send us a message and let’s find out together!

 

 

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