Working Capital
Management
Manage your working capital in the most cost-effective way to unlock cash, invest in the business and improve operating efficiencies
The term working capital management is a business strategy designed to ensure that a company operates efficiently by monitoring and using its current assets and liabilities to the best effect. Working capital is nothing but the difference between the current assets and current liabilities. In other words, an efficient working capital management means ensuring sufficient liquidity in the business to be able to satisfy short-term expenses and debts.
Apart from managing the current assets and liabilities, working capital management also includes
working capital financing at the lowest possible cost and utilizing the capital cost-effectively.Given the economic uncertainty, rising debt level, cost of capital and increased scrutiny from shareholders and investors are driving greater focus on maximizing cash flow. An efficient working capital management strategy leads to yielding substantial returns on investments, reduction in costs and risks, improvement in cash flow and liquidity to fund the business..
Is your organization using working capital management practices to maximize cash flow? If the answer is clear no or a feeble yes, but not done with the intent to unlock cash systematically, then you should get your working capital elements reviewed to achieve great savings.
✦ Deep Dive & transform end to end processes around inventory management, accounts payable, accounts receivable; that drive effective working capital management
✦ Develop a working capital benchmark to compare performance against your industry standards, best practices and identify a scope of opportunities tailored to your business
✦ Perform a fact-based, data-driven diagnostic review to identify ‘quick wins’ and longer-term opportunities
✦ Develop a detailed action plan along with the timeframe to generate cash and make sustainable improvements.
✦ Ensure buy-in and support from the identified stakeholders with those who will be responsible for delivery.
✦ Monitor Implementation along the key levers i.e Process optimisation throughout the entire working capital cycle , rationalization of Commercial terms, monitoring compliance to the changes etc
✦ Map and Measure Value Creation to the Organization
✦ Sustain & Evolve through Work Capital Management Policies & measurement of Performance Metrics etc. thereby facilitating continuous improvement.
