Our working capital surveys of nearly 2,000 companies in the US and Europe illustrate the difficulty of achieving sustained improvement in working capital performance.
European companies posted a 1.7% improvement in their cash conversion cycle (CCC) last year as both receivables and payables improved.
The 2016 US Working Capital Survey identified some possibly worrisome signs of deteriorating working capital performance.
Working capital or cash flow performance is often seen as a measure of a company's operating health. This issue of The Working Capitalist will help you evaluate and improve the health of your working capital capabilities, with special emphasis on making the cash collections process more effective and contracting sensibly to enable strong cash flow.
Working capital or cash flow performance is often seen as a measure of a company's operating health. Test your organization's working capital capabilities and find out how to make permanent improvements in your processes.
The 2015 Working Capital Survey of the top 1000 companies in North America and Europe found that a significant number of these companies waste 15% or more of their EBIT through inefficient working capital management. The same study found that only 1% of the companies have achieved improvements in cash conversion cycle over the past three years.
Best-practice and globally standardised receivables processes put ARCADIS on the path to generating €100 million cash to pursue acquisition goals.
Whether implementing targeted changes or addressing working capital management more broadly, following the lead of top performers by improving, automating and/or standardizing key processes can improve cash flow predictability and, thus, the ability to forecast cash needs more accurately.
Pressures from investors make public companies to spend much effort on making the numbers - especially working capital ones - look good at year end.
Working capital management and the relationship of cash flow performance to cost and revenue performance remains a largely unexplored avenue for many corporation.
Learn the critical success factors and reinforcing mechanisms that lead to long-term working capital improvements.
Depending on the industry, indirect spending accounts for 18-35% of a company's global revenue. The REL Consultancy's new paper discusses how to Increase your cash-flow by working capital optimizations of indirect expenses.
Treasurers have always played a central role in cash management, but mostly through control. Next-generation cash management requires treasurers to lead as well.
Gain insight on how you can avoid the 4 working capital pitfalls to ensure your project success in terms of achieving sustainable improvements in processes, cost and customer service.
Decentralised organisations often have a hard time achieving world-class working capital performance. Structural factors – such as far-flung operations, project-driven work, autonomous business units – often get in the way of efficient cash management.
When it comes to improving working capital practices, companies often seek a quick fix, such as a clear number that tells them how much money they might unlock if they only had better working capital practices.
First-rate working capital management skills are not easy to achieve. The 2015 Working Capital Survey of the top 1,000 companies in North America and Europe found that only 1% of companies have achieved improvements in cash conversion cycle (CCC) – a key measure of working capital performance – for the last three years in succession.
Driving sustainable change is challenging for global companies with processes distributed across dozens of countries. How is it possible to make change happen swiftly and with minimal side effects in a global corporate setting? And, especially, where the potential for cross-cultural misunderstanding abounds, and long-distance communication adds to the complexity. Successful working capital improvement initiatives emphasise the importance of intercultural change management.
Optimising working capital trade-offs is critical - especially in a recovering economy. The ultimate question is whether they're decided through guesswork or on the basis of fact-driven analysis rather than instinct.
General wisdom holds that any future growth would occur across a set of emerging economies commonly referred to as the BRICMK markets. To seize this opportunity one needs to understand the impact of expanding in emerging markets on companies net working capital (NWC) performance and how companies are managing processes to adjust this change.
To help CFOs build a cash culture, REL asked companies to share details of their cash-management practices.
Plan and implement steps to release cash from your working capital. Achieve a sustainable and improved working capital management.
Executives realize that in a volatile era, there is no substitute for cash. No matter how much revenue you recognize or how many assets you have on your books, the simple and enduring truth is that the only enterprises that survive are those that generate enough cash to keep their operations running.
The REL 1000 cash management surveys found that companies are hoarding
tremendous amounts of cash. In 2010, the U.S. 1000 companies had $853 billion, up 6 percent from the previous year and up an eye-opening 74 percent since 2005, while the Europe 1000 companies had €649 billion, up 18 percent from the previous year and 57 percent since 2005.
Key performance indicators (KPIs) are easy to derive and understand, and they help executives track the health of the entire business. While KPIs can indicate how well a specific area of the business is operating, they do not necessarily explain why the business is succeeding or struggling.
A Q3 2011 analysis of the auto industry indicated $13 billion in working capital opportunities for the top three US automakers and $6.7 billion for US auto suppliers.