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.
“As we continue to grow, that 30% released working capital will convert into several million euros less external financing needed. That really puts you thinking. Let alone to mention how much more financing we would need if our relative working capital would start to develop in the wrong direction.“
Merja Rantala, CFO
Pinja
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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.
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.
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.
See examples of what we actually do with a different kind of working capital related challenges.
Click the plus icon to see symptoms of the challenges, how to solve them, what the impacts are and related customer cases and blog posts.
Symptom
High Overdues
Solutions
Impacts
Symptom
Low Accounts Payable
Solutions
Impacts
Related blog posts
Symptom
Rising Accounts Receivable
Solutions
Impacts
Related blog post
Checklist: myyntisaamisten turvaaminen poikkeustilassa
Symptom
High amount of un-invoiced work in progress (WIP) in the balance sheet
Solutions
Impacts
Symptom
Low inventory turn
Solutions
Impacts
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:
Nordic management consulting company with offices in Stockholm, Helsinki, Gothenburg and Malmö. Our consultants have a wide competence base, working with Nordic as well as global assignments
