To reduce working capital and optimize cash, private equity firms need to understand what money is being spent and why as well as how much something should cost. Knowing what something "should cost" is achieved by having clarity into the cost drivers of the business and sound linkages between operating and financial plans and budgets. Specific areas of focus are major contracts (including aging outsourcing arrangements), procurement, and IT.
PwC offers an integrated, industry focused, cost-effective rapid approach to unlocking cash, removing hurdles that impede efficient working capital management and identifying opportunities to free up capital with minimal management disruption. PwC's approach focuses on both customary working capital cash drivers — inventory, receivables and payables — and unconventional drivers such as treasury, tax, benefits and insurance to unleash hidden cash.
By assessing the traditional and nontraditional cash drivers, you can develop actionable and measurable steps to improve cash flow.
Case study: Working capital optimization uncovers sustainable cost reduction opportunities of up to $21.5 million for a US manufacturer and yields greater value for the private equity client
For additional information please contact: Joseph McConville.