How many companies have been liquidated with healthy order books? How many senior executives have been forced to focus exclusively on debt repayments rather than strategic growth? Is the key focus after a management buy-out, sales growth or cash generation? If cash and liquidity are paramount to your company, focusing on cash flow may be your primary strategic priority.
Whereas cash is usually generated from profitable trading, our experience proves it can also be squeezed from working capital. Reducing receivables and inventory and increasing payables can significantly improve cash flow. Best-in-class companies have strategically analysed their approach to working capital management, releasing cash and improving customer service and satisfaction.
At PricewaterhouseCoopers, we
- Encourage companies to focus on working capital management, administrative procedures and quality of distribution.
- Identify weaknesses in internal systems, which give rise to collection issues and devise recommendations to help overcome them.
- Challenge inventory service level metrics, production processes, forecasting procedures, IT systems and transparency of information and drive change in line with global best practices.
- Assist companies develop an understanding of their payables philosophy and in analysing their spend per product / service per supplier, identify opportunities for extending payment terms with suppliers.
- Advise on the establishment of working capital incentives aimed at generating cash and improving customer service and satisfaction.
