Working Capital Management

Most companies can release significant amounts of cash locked up in operations and sustainably increase their profitability and company value by managing working capital more actively.

PwC is a competence leader in the field of Working Capital Management (WCM) The European Working Capital Management group pools experienced WCM practitioners across the world with various industrial and functional backgrounds such as procurement & purchasing, sales & marketing, finance, technical engineering and IT.

PwC has positioned itself as a competence leader in the field of WCM. PwC stands for optimisation through profound experience and has a strong track record in various industries for both national and multinational clients.

Increase your company's value through professional Working Capital Management The fundamental principles of Working Capital Management are clear: reduce the capital employed and improve efficiency in the areas of receivables, inventories and payables. Practical implementation, however, is a challenging task on the one hand due to conflicts inherent to cross-functional and trans-sectoral issues, and on the other because of the high complexity of individual optimisation measures.

WCM initiatives release capital employed and increase liquidity that can be used for strategic investments or the reduction of debt. In addition, profitability is enhanced due to an efficiency improvement within the processes and a reduction in cost of capital. Considering all of these effects, improving working capital inevitably leads to a sustainable increase on Economic Profit / ROCE and therefore to a higher corporate value.

Potential Issues Based on our experience of working with clients to improve their working capital, CEOs, CFOs, Group Finance Directors, Group Treasurers or Shareholders are currently likely to face the following issues:

• Additional funding requirements due to increased working capital driven by business growth
• Lack of visibility on cash and working capital performance across the organisation, and entire working capital cycle
• Lack of cash awareness across departments and geographies, with no working capital targets and incentives
• Difficult working capital balancing act managing the trade-offs between cash, cost and service
• High levels of overdue receivables and bad debt write-offs
• Sub-optimal controls in relation to setting and managing payment terms of customers and suppliers
• Broken Sales Operations and Planning (S&OP) process and poor stock visibility
• Poor levels of customer service and On Time In Full (OTIF)

How we can support you

• Complete a working capital benchmarking exercise to compare performance against peers and identify potential improvement opportunities
• Perform a diagnostic review to identify ‘quick wins’ and longer-term working capital improvement opportunities
• Development of detailed action plans for implementation to generate cash and make sustainable improvements
• Assist the implementation of sustainable working capital reduction by robust, efficient and collaborative processes, through focus on the key levers:
  • Identification and improvement of commercial terms
  • Process optimisation throughout the entire end-to-end working capital cycles
  • Compliance and monitoring
  • Creating and embedding a ‘cash culture’ within the organisation, where the trade-offs between cash, cost and service are evaluated and optimised.