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Working capital and cash

There is a well-known phrase: 'Turnover is VANITY, profit is SANITY, cash is REALITY"

Releasing excess levels of cash tied up in working capital represents the cheapest form of finance available to a company.  CFOs are increasingly being tasked with optimising working capital performance.  However, maintaining control of working capital as companies increasingly look to grow, investing in new products, international diversification and M&A activity can be extremely challenging.

For example, keeping pace with the wide range of working capital financing options to fund structural funding requirements is increasingly a hot topic. As is driving an understanding of how to manage pressure on commercial terms from customers and suppliers who are seeking to drive their own cash flow improvements.  All of which requires internal processes, organisation and controls that are aligned to deliver effective working capital management.

Releasing cash, supporting growth

One of the common reasons why companies fail to sustain the benefits of working capital initiatives is that they tend to be tactical in nature and focused on the elements of the process that finance can control. Often they treat the symptom, as opposed to understanding and dealing with the root cause of the problem.

We often identify and deliver a release of cash equating to between 10 – 20% of Gross Working Capital, or as much as 5% of annual turnover.

To deliver this level of improvement requires an approach focused on dealing with the underlying issues, which can range from the quality and appropriateness of commercial terms through to the internal 'self-help' available through improved process and control.

The breadth of operational and professional experience in our team enables us to influence parts of the wider organisation such as sales, procurement, operations and logistics who all have a major part to play in any effort to reduce working capital. 

Our proven methodology drives accelerated identification of the issues with quantification of the benefit case. Potential improvements are prioritised based on value and speed to deliver, working with management to design and implement the solutions.

Our services include;

  • 100 day working capital and cash flow planning
  • Cash flow forecasting
  • Cash flow leakage
  • Exit readiness
  • Forecast-to-Fulfil (Inventory)
  • Order-to-Cash (Accounts Receivable)
  • Procure-to-Pay (Accounts Payable)
  • Working capital assessment and reduction
Director, Head of Finance & Working Capital Consulting

Alex Mumford

+44 (0)20 7865 2852

Find out more