REL

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.