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Managing working capital

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We help organizations increase shareholder value and manage their working capital – not only by reducing costs through strategic sourcing initiatives but also by releasing cash through the optimization of payables, receivables, and inventory.

Maintaining a healthy working capital position is essential to balance growth, profitability, and liquidity. But it is a difficult challenge for many businesses. One reason is that most organizations are focused – and incentivized – exclusively on EBITDA. As a result, effort and resources are usually concentrated on increasing revenue or reducing costs while maintaining service levels. 

Reducing working capital requirements can further enhance shareholder value and enable you to realize greater profitability with the same level of capital investment.

Benefits of working capital optimization

Liquidity and working capital improvements provide you access to financing at a lower cost than alternatives, such as bank finance, without diluting equity or issuing shares. The balance sheet can feasibly improve by as much as 20%, and these gains are frequently achieved almost immediately, with relatively little effort.  

As well as improving your ability to fund day-to-day operations, working capital optimization typically results in better working relationships throughout your business – and your entire supply chain.

Our three-phase approach to liquidity and working capital improvements

We use a three-phased approach to help you identify, deliver, and sustain working capital improvement opportunities:  

  1. Outside-in view - Identifying the areas of opportunities and what elements of working capital to prioritize. Typically, one week in duration, the primary outcome is a preliminary identification and quantification of opportunities. 

  2. Opportunity assessment (OA) - A deep dive to identify and confirm priority areas of focus. This phase focuses on gaps in performance in three key areas – accounts payable, inventories, and accounts receivable – and how to align them with best practices. Typically, three to four weeks in duration, the primary outcome is a business case documenting the size and nature of working capital optimization opportunities and a detailed plan to achieve them.  

  3. Implementation – We deploy an expert team that uses our proven methodology to deliver the measurable benefits identified in the OA. The six- to nine-month project outcome is tangible, with sustainable benefits and a transfer of skills and knowledge to enable ongoing improvements.

Innovation

Our in-house digital capabilities allow us to rapidly provide you with customized digital tools that enhance the identification of working capital improvement opportunities. Importantly, they also enable the performance of identified improvement initiatives to be easily tracked, monitored and reported. 

Our digital tools include a comprehensive dashboard for "at a glance" metrics and progress updates, ensuring savings and improvements are delivered, and ongoing opportunities can be identified.