Top tips for better working capital management | AccountingWEB

Top tips for better working capital management

Cash is the number one priority for businesses and yet many CFOs are afraid of leading the charge when it comes to working capital management initiatives. Hugh Williams explains why it’s time for CFOs to get their hands dirty.


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john mardle's picture

Working Capital --CFO's need to get their hands dirty

john mardle | | Permalink

Whilst agreeing wholeheartedly with Hugh's posting I would like to add that the Integrated Business Planning (IBP) piece needs, in our view, to have the management team thinking 'alongside experts' who have the experience and knowledge of how such plans need not only to be long term but continuously updated with what we have called working capital DRIVERS. These are the real metrics behind the KPI's that then deliver the DSO.DPO and DIO so loved by banks and the finance fraternity but actually meam very little in practice.

Credit, loans, refinancing will only be given by those who can see the real liquidity so that they know the debt, loan can be serviced (look at Mouchel and now HMV) and with trillions of dollars of debt due before 2015 (the majority of  the UK debt matures in 2012/13 accoording to Moody's) now is the time to tackle working capital optimisation ,before its too late!

john mardle

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