June 22, 2010

Business Finance Webcast, "Forecasting 2010: Improving Performance with Predictive Cash Flows,"

REL Americas President Mark Tennant and Business Finance Editor in Chief Jack Sweeney discuss research showing how companies struggle to achieve accuracy in cash forecasting, and best practices companies use to identify forecasting obstacles, improve organizational alignment, and enhance measurement and management accuracy.

June 17, 2010

Handelsblatt, "Sticking to the guns after the crisis,"

Indepth German-language coverage of the 2010 REL 1000 analysis of the working capital performance of the largest public companies in Europe. The three articles in this two-page spread focus in part of the performance of DAX companies. The lead story also includes quotes and information from several German companies, including SAP, Bayer, Salzgitter and Klöckner. Separate article in the spread focus on the performance of small- and medium-sized companies in the DAX, and on the performance of German companies in comparison to those in other countries of Europe. (Note: The underlying research materials are also available directly from REL, with free registration, here www.relconsultancy.com/workingcapital)

June 14, 2010

Business Finance Video, "Achieving Working Capital Improvements,"

According to a recent study by REL, only 34% of industries posted an improvement in days working capital (DWC) last year, and most companies took a big hit in working capital performance as collections slowed and inventory grew. REL President Mark Tennant outlines some best practices designed to improve DWC, while discussing the study's findings with Business Finance editor in chief Jack Sweeney.

June 4, 2010

Business Finance, "Cytec CFO: Touts Working Capital Elixir,"

Cytec Industries CFO David Drillock speaks with Business Finance Editor in Chief Jack Sweeney about how Cytec achieved $200 million in working capital improvements as part of an aggressive working capital management strategy, accomplished with the support of REL. Recorded last month at The Hackett Group's 20th Annual Best Practices Conference.

June 3, 2010

Dow Jones, "IN THE MONEY: Recession's Fiscal Fitness Gives Way To Flab,"

Corporate America got fiscally fit during the recession. But as the recovery picks up steam, signs are emerging that exercise might have been a passing fad, according to a survey by REL, the working-capital consulting unit of Hackett Group. In the depths of the recession, companies collected debts quickly and strung out payments to creditors, tactics that allowed them to build cash and dodge borrowing. Now, that thrift appears to be reversing. This trend should concern investors because it means companies aren't using their capital as effectively as they could be. In turn, that means companies could be doing better on a host of efficiency metrics--such as return on capital--to which investors should pay attention.

June 3, 2010

CFO.com, "To Cut Working Capital, Try Bonuses,"

Pay incentives for hitting working capital targets proved effective during the recession, although companies are already starting to scale them back, according to REL President Mark Tennant, and the experiences of companies such as Cytec, Allergan, and Heineken.

June 1, 2010

CFO, "Working it Out,"

This cover story package spotlights findings from the 2010 REL/CFO US Working Capital research. While most observers view 2009 as the very heart of the Great Recession, it was also - in terms of working capital - the beginning of the Great Hangover. As 2008 drew to a close and the full extent of the financial crisis became clear, many companies scrambled for cash by pushing down hard on every available working capital lever at their disposal. For them, it was payback time: inventories had to be replenished and overdue bills were finally paid in full. For other companies, those further down the supply chain or with longer cycle times, the full recession didn't hit until late in the year, when unsold inventory swelled, customers lobbied suppliers for longer payment terms or discounts, and those suppliers asked their suppliers for leniency. Either way the result was the same: 2009 was one of the worst years ever for corporate working capital performance. The article also features the working capital improvement initiative of REL client Cytec and their CFO Dave Drillock, along with efforts by Intel, Allergan, Thomson Reuters, and Hughes Communication.

May 27, 2010

L'Agefi (FR), "Global financial crisis had an impact on the Europeans' Working Capital Survey in 2009,"

This article, in the French-language business L'Agefi, details results from the 2010 REL Europe Working capital research, focusing in part on the performance of French companies.

May 26, 2010

FinancialDirector (UK), "Spare Tyre,"

It seems that after a decade of spending, businesses have actually got into the habit of austerity and of saving - but perhaps a little too zealously. The latest study of working capital practices by REL reveals that there is excess capital of €742bn held on the balance sheets of Europe's largest companies by revenue.

May 25, 2010

Business Finance, "Molson Coors CFO Discusses Outsourcing's Pros & Cons,"

Over a period of twelve months, Hackett client Molson Coors outsourced its IT, HR and finance functions - from selection to completion - a feat that transformed and consolidated the brewery's worldwideoperations. At The Hackett Group's 20th Annual Best Practices Conference, Molson Coors CFO Stewart Glendinning spoke to Business Finance Editor in Chief Jack Sweeney about the success and challenges of his company's outsourcing journey.

May 14, 2010

Diversity Executive, "Hackett: Most Supplier Diversity Programs Simply Fail To Deliver,"

While world-class procurement organizations continue to outperform their peers in driving supplier diversity spending, a new study by The Hackett Group Inc. identifies several critical ways that most companies fail in their supplier diversity programs. According to Hackett's research, most rely on overly simplistic measures to evaluate the progress of supplier diversity programs, and never truly assess whether programs are meeting corporate objectives. Most companies also fail to consider whether a few large suppliers or many smaller suppliers best supports their corporate goals.

May 6, 2010

Accountancy Age (UK), "Drop the Debt,"

Tax incentives are needed from the new government to keep interest rates down and reduce corporate borrowing and working capital, according to REL Senior Director Brian Shanahan.

May 1, 2010

Recruitment Matters (UK), "Avoid the Need to Get Heavy-Handed,"

This article on how UK companies can improve collections policies cites REL's research showing that the UK is a "relatively benign payment environment" with typical Days Sales Outstanding (DSO) of 43 days. This compares favorably to the European average of 58 days, the French average of 71 days and Italy's DSO, which is 83 days. Note: Once you click on the link below, the article begins on page 35.

April 27, 2010

Inside Edge, "Late Payers: Who's Really to Blame?,"

Are late-paying customers really delinquents, or just unhappy? Before canceling accounts or calling a collection agency, make sure past-due payments aren't as much your fault as theirs. Some companies purposely pay slowly to conserve cash. But, according to Mark Tennant, a working capital expert with the consulting firm REL, many late payers are simply reacting to mistakes made by vendors that charged the wrong amount, sent an invoice to the wrong address, left key information off an invoice, or, perhaps worst of all, delivered damaged or out-of-spec goods or services. Pricing errors are the most common culprit behind late payments, according to Analisa DeHaro, leader of REL's North American customer-to-cash practice.

April 21, 2010

Big Fat Finance Blog, "Maximize IT Through Portfolio Management,"

The Hackett Group's research suggests that application portfolio management is the key to a number of good things you want from IT, including improved effectiveness, cost reduction, and better partnering with the business. The trick lies in reducing the number of applications in the portfolio. Top-performing IT organizations, according to Hackett, operate with nearly half the applications per thousand end-users of typical companies.

March 16, 2010

Big Fat Finance Blog, "Even A Recovery Presents Challenges"

It appears that the economy is slowly and painfully inching toward a turnaround. Unemployment is holding steady at 9.7 percent, reports the Bureau of Labor Statistics, and The Bureau of Economic Analysis says that GDP grew at an annualized rate of 5.9 in the fourth quarter of 2009.

It all sounds great. And it is. However, a recovering economy can present its own challenges. Most significantly, if companies don't continue to focus on working capital and cash flow management, they can end up back in trouble. That's one conclusion of some research recently completed by REL, a consulting firm focused on working capital management. REL examined the ins and outs of the cash flow of the 1,000 largest public companies in the U.S. The researchers found that working capital performance, as measured by days of working capital (DWC), improved by about five percent between the second and third quarters of 2009, to 31.7 days. While a move in the right direction, the number remains worse than it was in 2007 and 2008, when it dipped below 30 days.

March 12, 2010

CFO.com, "Good to the Last Drop"

Despite the overall lack of top-line growth during the economic downturn, many companies have stayed afloat by downsizing staff and eking out supply-chain efficiencies. In the face of continuing unemployment and the attendant lag in consumer demand, however, how long can companies maintain respectable margins merely by growing leaner?

Maybe longer than you might think. Opportunities still abound for doing more with less, according to a new study of the 1,000 largest U.S. companies (in terms of sales) by REL, a division of The Hackett Group. Indeed, the study concludes that those companies could wring a total of as much as $709 billion in excess cash flow from their supply chains by adjusting their inventory levels, getting their customers to pay their bills on time, and managing their accounts payable carefully, according to research on working capital for the third quarter of 2009.

February 24, 2010

SupplyChainBrain, "Sales & Operations Planning: Lessons Learned to Get Supply Chains Back in Balance in 2010,"

Analyst Insight, from Archstone Principals Dave Sievers and Bob Allen: The recent economic turmoil has pulled into sharp focus the issue of h ow to manage increasingly volatile supply chains. Through late 2008 and 2009, many companies simply panicked and aggressively cut both production and productive assets. These companies are beginning to pay for those aggressive cuts as demand is now starting to increase -- straining diminished capabilities. For 2010, we offer guidance on how companies can get supply chains back in balance and get sales and operations planning right.

February 4, 2010

REL Research Alert: Many Companies Fail to Build a "Cash Culture"

The global financial crisis has made cash a major priority for most companies. But according to a new study from REL, a division of The Hackett Group, Inc. (NASDAQ: HCKT), many still fail to take the key steps required to build a corporate culture that successfully focuses on cash.

February 2, 2010

Big Fat Finance Blog, "Putting the Focus on Cash"

So cash is king, once again. Not that it ever was dethroned; it's just that, for a while, it shared its perch with other corporate goals, like growth. Not anymore. Credit is tight and sales are down, so companies have to wring all they can from the funds they have on hand. This prompts the question, Just how do you do that? A recent report by REL/Hackett Group, "Cash Culture Study," offers some strategies that companies can use to foster a "cash culture."

January 23, 2010

CFOZone, "Crisis has companies focused on cash"

Companies are managing their cash more effectively than they were before the onset of the financial crisis, a survey released on Wednesday suggests. The survey of 53 companies with an average of $24 billion in revenue found that 94 percent consider cash flow optimization to be important or very important. REL's research details the key steps companies can take to build a cash culture, and how prevalent they are in companies today.

December 16, 2009

FinanceWeek (UK), "REL: Cash flow is king"

Cash on hand between 2007 and 2008 fell at least 10% in all but two sectors. Total cash on hand, including short-term borrowings, fell 16% to 14.7% for PCs and peripherals to 2.6% to 1.9% for multi-utilities, according to a new study by REL, the working capital division of The Hackett.

November 23, 2009

Handelsblatt (DACH), "Supply Shortages Threaten to Empty Warehouses"

Coverage, in German, of REL's DACH region working capital analysis. Infineon executives are also quoted, and working capital performance by about a dozen DACH companies, including Volkswagon, Man, Beiersdorf, BASF, and Alcon, is highlighted.

August 31, 2009

Wall Street Journal, "Big Firms Are Quick to Collect, Slow to Pay,"

Large corporations are tightening the screws on their smaller counterparts as the credit crunch intensifies companies' efforts to hold on to their cash. In an example of corporate Darwinism at work, the recent round of quarterly earnings results showed companies with annual revenue of more than $5 billion sped up their collection of cash from customers while slowing their own payments to suppliers.

Firms with less than $500 million in annual sales, on the other hand, generally took longer to collect cash and paid their bills faster than in the same period a year ago, according to an analysis conducted for The Wall Street Journal by REL, the working-capital division of global strategic advisory firm The Hackett Group.

August 17, 2009

FinanceWeek, "How to make your working capital work harder"

Working capital is front of mind for most business. Lending won't return to pre-recessionary levels anytime soon. But there are simple techniques to leverage working capital, according to REL, a division of The Hackett Group.

July 14, 2009

Handelsblatt (DACH), "Too chubby,"

This leading daily news outlet generated coverage, in German, of REL's 2009 European Working Capital research, focusing on the performance of German companies.

July 14, 2009

Associated Press (DACH), "German groups wait longer and longer for their money"

This article, in German, focuses on REL's working capital research.

July 7, 2009

Reuters, "Poor cash forecasting could mean more bankruptcies,"

The brutal recession has made it increasingly difficult for corporate executives to forecast cash flow, a problem that could contribute to a surge in bankruptcies in the face of weak credit markets. About 80 percent of the 1,000 largest global companies are unable to forecast cash flow over the next quarter within a 5 percent range of their actual performance, according to a study by The Hackett Group Inc and it's REL Working Capital unit.

June 26, 2009

Shared Services & Outsourcing Network, "Top Ten Tips for an Optimal Order-to-Cash Process,"

It's the lifeblood of the business, the fuel for the corporate machine: money. And it's O2C's job to secure it and pipe it in, as smoothly and efficiently as possible. Choke up here and you're depriving your organization of critical energy at the worst possible time; get all channels running fluently, however, and without obstruction, and you'll be driving the business forwards on injections of high-octane cash. REL Senior Director Brian Shanahan contributed insights on managing credit risk, payment terms, and other issues to this article.

June 5, 2009

CNBC Europe, "Unlocking Working Capital,"

According to a report by REL and CFO Europe Magazine, the total improvement in working capital among the 1000 largest public companies in Europe in 2008 equated to $53.8 billion. But strong performance by oil and gas companies masked degradation in performance by others, and the gap between leaders and laggards widened significantly. REL's Daniel Windaus discusses key results from the study.

June 1, 2009

CFO, "Cleaner (Balance) Sheets: The 2009 Working Capital Scorecard,"

Plato called necessity the mother of invention. It may also be the mother of collection. Squeezed by a slowing economy and nearly frozen credit markets, U.S. companies showed themselves surprisingly adept last year at freeing cash from the one remaining source at hand: their balance sheets. Ramping upcollect ion efforts and paring down inventories, the 1,000 largest companies slashed days working capital (DWC) in 2008 by 6.4% - the best improvement on that front in at least five years, reports consulting firm REL, the Hackett Group division that compiled this 12th annual edition of the CFO/REL Working Capital Scorecard. The result: a total of $62.7 billion liberated from working capital.

May 28, 2009

Reuters, "U.S. companies taking longer to collect bills: data,"

As the U.S. recession deepened late last year, it took 9 percent longer for businesses to collect money they were owed as customers held onto their cash, according to new research from REL, the working capital division of The Hackett Group. That presented corporate Am erica with a conundrum: Each company's desire to protect its own balance sheet by holding out on paying bills caused ripples of pain through the economy as other companies made the same decision. The 1,000 largest U.S. companies took an average of 39.7 days to collect on sales in the fourth quarter, up from 36.4 days a year earlier, according to the REL data.

April 30, 2009

CFO Europe, "CFO TV's Cash Clinic"

"Cash Clinic" is a new video series dedicated to helping senior finance executives explore leading-edge cash management strategies. These programmes will focus on the key concerns of finance chiefs when it comes to e nsuring th at cash remains king at their companies. From working capital management to banking relationships to budgeting and forecasting, the series will address all aspects of cash management best practice via panel debates and case studies.

April 1, 2009

CFO, "A Current Dilemma,"

Few metrics signal looming danger more sharply than a declining current ratio, yet many industries began the year with current assets outpacing current liabilities by a narrow margin. Seven sectors saw current ratios stumble in 2008, according to REL Consultancy, which compiled the data. Worst hit were independent power producers and energy traders, which suffered a notable 36 percent decline in their aggregate current ratio, to 1.4.

February 19, 2009

SupplyChainBrain.com, "Tight Credit Markets? It's Time to Liberate YourCash,"

Working capital optimization has always been the least expensive and most readily available form of cash. With tightening credit markets the option of liberating cash from a company's operational processes has moved to the forefront. Inventory optimization presents the second-largest opportunity among the working capital components after trade receivables and ahead of trade payables.This analyst insight from Henri van der Eerden offers REL's guidance on how companies can benefit from optimising inventory performance.

December 9, 2009

ComputerWorld, "Survey: One in four IT jobs moving offshore,"

Large companies are accelerating their use of offshore outsourcing, and as many as a quarter of IT jobs at Global 1,000 firms may be moved offshore by 2010, according to The Hackett Group, a Miami-based consulting firm whose clients include many multinational corporations. According to the firm's research, those large companies -- which have revenues of at least $5 billion -- will move about 350,000 corporate jobs offshore over the next two years. More than half of those jobs will be in IT, with the remainder in finance, human resources and procurement.

December 8, 2008

CFO Europe, "Cashing In"

This article spotlights findings from the new REL/CFO Europe Cash Masters scorecard, which shows a clear opportunity for European companies to improve their bottom line through an increased focus on improving cash conversion efficiency (CCE) - the amount of cash flow that companies derive from operations as a percentage of sales.

December 1, 2008

CFO, "Tight Makes Right: Companies still have plenty of opportunity to squeeze more cash out of operations,"

Regal Beloit Corp. CFO David Barta has taken approximately 30 days out of his company's cash cycle over the past four years. But he and the rest of the leadership team at the $1.8 billion maker of motion-control products want more. "Our commitment to the board this year is to take another 3 days out of the cycle," Barta says. "That is not a huge stretch, but it is something for which my feet are held to the fire."

November 20, 2008

The Economist, "Managing in the downturn: Desperately seeking a cash cure,"

From Citigroup to British building product maker Wolseley and beyond, the recent global economic turmoil has driven firms to cut hundreds of thousands of jobs. Companies globally have been hammered by the fallout from the subprime-mortgage debacle and its repercussions in financial markets. Many are desperately seeking a cure. And the most attractive medicine on offer looks like cash.

November 6, 2008

Dow Jones Newswire, "IN THE MONEY: Minimize Layoffs By Creating A Cash Mine: Study,"

The average global corporation is sitting on enough cash to buffer half the impact of a yearlong recession, if management could only figure out a way to get their hands on it That's the conclusion of a study released this week by strategic consultants at the Hackett Group.

Signs abound that this recession could be severe. Motorola Inc; . (MOT) recently announced it was laying off 3,000; Goldman Sachs Group Inc.(GS); 3,260; Xerox Corp. (XRX); 3,000; and Chrysler LLC; 5,000. By contrast Hackett estimates the 1,000 global companies in its study could minimize job cuts and s ave $3.2 billion, or nearly 13% of annual revenue, if companies were more strategic.

November 1, 2008

CFO Asia, "Finding Your Strong Suit,"

The latest Cash Masters Survey from CFO Asia and REL offers hints on how to prepare for a slowing economy. As Warren Buffett likes to say, you don't know who's been swimming naked until the tide goes out. Although this latest CFO Asia/REL Consulting Cash Masters Survey covers 2007, a happier time for the APAC 850 (the 850 largest Asia Pacific companies in terms of sales), it may offer a few hints about how to get your business suit ready for what promises to be one of the corporate world's highest, driest periods in decades.

September 1, 2008

CFO, "No Time to Lose: The 2008 Working Capital Survey,"

Beware your survival instincts: they may dampen corporate performance more than you might expect. With a recession looming or quite possibly upon us, it can be tempting to ease up on receivables and retain inventory in order to placate cash-strapped customers. But those seemingly small sacrifices actually impose a steep cost, diverting precious cash to working capital. CFOs who want to bolster the case for strict working-capital policies may find plenty of support in the 11th annual CFO/REL Working Capital Scorecard.

September 1, 2008

CFO Asia, "Buddy, Can you Spare a Trillion?"

Asia's top 850 companies failed to make full use of US $833 billion in working capital because of inefficient cash flow practices. Last year, CFO Asia's 2007 Working Capital Survey estimated that the region's 725 biggest companies, excluding automakers, had US $535 billion in working capital unnecessarily tied up in receivables, payables, and inventories in 2006. It's the same story in this year's survey, which covered 850 of the Asia-Pacific region's top enterprises. According to REL, the U.S. consultancy that conducts the study, US $833 billion in total working capital was not put to productive use in 2007.

August 31, 2008

Associated Press, "Checks in the Mail,"

It's taking more time for companies to collect on their sales, longer than any time since the 2001 recession. Cash Flow consultant REL, (a division of The Hackett Group) and CFO Magazine found it took the country's 1,000 largest publicly traded businesses, excluding automakers, an average of 41 days for them to collect their money from customers in 2007. That's a 3.4 percent jump from 2006.

August 27, 2008

Reuters, "Corporate America taking longer to collect: study,"

Corporate America is having the hardest time getting its customers to pay their bills since the last U.S. recession in 2001, according to a study released on Wednesday. The 1,000 largest U.S. public companies in 2007 took 41 days on average to collect payments from their customers, up from 39.7 days a year earlier and 39.2 days in 2001, the study by consultancy REL and CFO Magazine found.

August 27, 2008

Financial Times, "Crunch brings working capital into sharp focus,"

U.K. companies are now doing a worse job at managing working capital performance, as they also see their ratio of free cash flow to sales falling sharply, according to research by REL, a division of The Hackett Group.

July 22, 2008

California Executive, "How to Handle Delinquent Accounts Before Calling Collections,"

This article on how companies can reduce late payments in the current cash-strapped economy, includes insights from REL Global Practice Leader Hye Yu.

July 8, 2008

CFO Europe, "Dash for Cash"

With credit at a premium, freeing up funds from working capital gains a new urgency. This cover story features findings from the 2008 REL/CFO Europe TWC Research. It also profiles two companies that have made dramatic improvements in TWC - German commercial vehicle group MAN and Italian white goods manufacturer CFO.

July 8, 2008

CFO Europe, "Working Capital Scorecard 2008"

Companies have improved working capital management, but not by much. This article provides detailed results from the 2008 REL/CFO Europe TWC Research, and links to the complete survey results, which provide detailed metrics for the 1000 largest public companies in Europe.

June 30, 2008

CNBC Europe, "The Check's in the Mail"

Europe's biggest companies are paying their suppliers more slowly, bringing the average pay period to over 45 days, a new report shows. Brian Shanahan from REL discusses the findings.

May 1, 2008

CFO, "Let the Games Continue,"

Last year, when we first took a look at the corporate propensity to prop up fourth-quarter results at the potential expense of the following quarter's performance (see "Fourth and Goal," November 2007), recession loomed on the horizon. Today everyone from Warren Buffett to a bevy of economists to, in fact, CFOs say that the recession isn't just looming, it's here - and it's not leaving anytime soon.