Improve cash flow management

World-class companies are able to rise above common challenges to yield substantial returns in service delivery, risk reduction, cost reduction and cash flow improvement. At the same time, they create liquidity to fund acquisitions, product development, debt reduction, share buy-back programs and other strategic definitions.

Keys to effective working capital management

For more than 30 years, we have honed an approach that helps clients improve working capital and cash flow management. Our clients gain the benefits of:

  • Our extensive working capital management experience and deep expertise in inventory management (forecast-to-fulfill), accounts payable (source-to-settle) and accounts receivable (customer-to-cash) processes
  • Our comprehensive cash flow analysis that considers all the process that drive effective working capital management, as well as your strategy, policies, enabling technologies and training
  • Our holistic perspective for managing the end-to-end processes that influence working capital performance and cash flow management
  • Our collaborative and hands-on working style that helps your team build capabilities to sustain continuous process improvement and working capital improvements over time
  • Our insights gained from working with many of the world's leading businesses to improve working capital management processes – including best practices that promote operational excellence and successful process transformation
  • Our ability to adapt these world-class working capital management practices to your unique business environment and needs

Working capital management indicators and process metrics

Well-managed businesses measure and track performance using the metrics that matter most. A carefully selected set of working capital performance metrics translates your business strategy into tangible objectives. We use established metrics to help you measure performance, gauge continuous process improvement and move your business closer to objectives.

Our cash flow analysis uses relevant process metrics based on our qualitative interview findings, as well as our understanding of your operating and business model, customers, suppliers, industry and markets. We help you define these metrics, determine how to extract them from your systems, and establish reporting capabilities for managing and tracking working capital improvement. Then, we convert them into a working capital dashboard or other tool that becomes part of your ongoing process management.

We use process metrics such as these to assess the health of your working capital management practices, help you understand how your performance compares with peers and world-class organizations and equip your organization to facilitate continuous process improvement:

Working capital performance
  • Cash conversion cycle (CCC)
  • Days sales outstanding (DSO)
  • Days payables outstanding (DPO)
  • Days inventory outstanding (DIO)
  • Net working capital value
  • Net working capital as a percentage of sales
  • Shareholder value add (SVA)
  • Return on capital employed (ROCE)
Headline indicators
  • Payables
    • Days payables outstanding (DPO)
    • Weighted average days to pay (WADTP) actual vs. standard
    • Weighted average terms (WAT)
    • Early/late payment
  • Receivables
    • Days sales outstanding (DSO)
    • Best possible days sales outstanding (BPDSO)
  • Inventory
    • Inventory value
    • On time in full (OTIF)
    • Forecast accuracy
    • Product availability
Operational process metrics
  • Payables
    • Early/late payment
    • Spend per term
    • Supplier Pareto
    • Payment run profile
    • Percentage EDI
    • Order to settlement cycle time
    • Blocked payments
    • Contract term leakage
    • Volume of purchase with PO
    • Average spend per suppler per category
  • Receivables
    • Cycle time
    • Order errors
    • Cash target
    • Dispute reason
    • Days billing outstanding
    • Days to cash
    • Weighted average days unbilled
  • Inventory
    • Supplier variability
    • Aging inventory
    • SLOBS (slow moving or obsolete inventory)
    • Forecast bias
    • Capacity utilization
    • Life cycle management
    • Inventory integrity
    • Lead times
    • Adherence to plan
    • Back orders

Contact us

Take the first step toward releasing more cash from your operations. Contact us today for a complimentary cash flow analysis.